New report exposes breadth of medical practices owned by private equity – UC Berkeley Public Health

The American Antitrust Institute (AAI), in collaboration with the Petris Center on Health Care Markets and Consumer Welfare of the University of California at Berkeley (UCB) and the Washington Center for Equitable Growth (Equitable Growth), announced the publication of a new report on private equity ownership in healthcare.

The report, Monetizing Medicine: Private Equity and Competition in Physician Practice Markets, highlights the voracious private equity acquisition of medical practices in recent years. The analysis evaluates market penetration in 10 practice specialties within US markets, the impact on market shares and concentration, as well as pricing and expenses.

The report’s lead author, Professor Richard Scheffler, Distinguished Professor of Health Economics and Public Policy and director of the Petris Center at UCB, noted that this report provides compelling evidence that the incentives to put profits before patients have become stronger. with an increase in private equity ownership of medical practices. This will fundamentally change the way medicine is practiced.

The findings of the reports are expected to attract significant attention from competitive law enforcement and health care policy makers. For example, the number of private equity buyouts of medical practices grew six-fold between 2012 and 2021. Some markets have been heavily penetrated by private equity, with a single private equity firm owning more than 30% in one or more medical specialties. The study compares price increases in those markets to all markets and finds that they are nearly 1.5 to over 3 times higher. This is true for key areas of medicine including: gastroenterology, dermatology, and obstetrics and gynecology. Findings for price increases at other physician practices with private equity ownership are available in the full report.

The policy implications surrounding the analysis of the private equity ownership reports of medical practices are significant. Co-author of the report, Laura Alexander, director of markets and competition policy at Equitable Growth, explained: Our findings underscore the broad implications that the rapid and invisible consolidation of physician markets by private equity funds has had for the competition, patients and anyone who pays for healthcare practices. It is clear that attention and action is needed by law enforcement and policy makers to address these accelerating takeovers.

The report clearly frames a number of immediate policy measures that would strengthen competition enforcement and healthcare policy in the practice markets. For example, reporting and monitoring acquisitions of small healthcare providers, especially by private equity funds. Key adjustments to the reporting requirements of the Hart Scott Rodino (HSR) Act would support increased antitrust enforcement. Mandatory reporting to increase transparency of medical practice ownership is also key. Other policy implications include closing regulatory loopholes that distort competition in the healthcare sector and expanding liability to private equity funds for portfolio company misconduct.

Finally, the analysis in the report should draw much-needed attention to lowering barriers to entry into concentrated physician markets and developing additional sources of funding for capital investment. Diana Moss, president of AAI, noted that the report makes clear that physicians need more options to restructure their practices so they can continue to do what they do best while practicing medicine. Selling to private equity or other large corporate entities shouldn’t be the only option on the table.

Funding for the project was generously provided by Arnold Ventures. The report was written by: Richard M. Scheffler, PhD, Distinguished Professor of Health Economics and Public Policy; director of the Nicholas C. Petris Center on Health Care Markets and Consumer Welfare, University of California, Berkeley; Laura Alexander, JD, Director of Markets and Competition, Washington Center for Equitable Growth; Brent D. Fulton, PhD, MBA, research associate professor of health economics and policy; Associate Director of the Petris Center; Daniel R. Arnold, PhD, assistant research economist; Research Director of the Petris Center; and Ola A. Abdelhadi, PhD, postdoctoral fellow, Petris Center.

Read the full report here.


For more information, please contact:

  • Richard Scheffler (UCB): (510) 508-5079, rscheff@berkeley.edu
  • Laura Alexander (Equitable Growth): (202) 276-4050, lalexander@equitablegrowth.org
  • Diana Moss (AAI): (202) 828-1226, dmoss@antitrustinstitute.org

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