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Physicians

Consolidation of Physician Practices and Private Equity Acquisitions in Gastroenterology

Strategic Insights

— 1 min read

A new research study from Brown University has shed light on the effects of private equity acquisitions on physician practices in gastroenterology. The study examined data from 2015 to 2020 and found that after a private equity acquisition, prices increased by $92 per claim, or 28.4 percent, driven by a 78.1 percent increase in professional fees. This suggests that private equity firms may be using various avenues to raise prices, primarily through professional fees.

Key Takeaways:

  • The study used novel ownership data on gastroenterology practices linked to commercial claims for the period 2015-20 to examine the effects of private equity acquisitions.
  • After a private equity acquisition, prices increased by $92 per claim, or 28.4 percent, driven by a 78.1 percent increase in professional fees.
  • Facility fees did not exhibit a statistically significant change, but utilization increased after a private equity acquisition.
  • The study suggests that policy makers may need to reevaluate their strategies for reducing spending on healthcare, as unchecked growth in professional fees in private equity-owned outpatient settings may negate some of the intended effects.
  • Private equity firms may be using various avenues to raise prices, but professional fees appear to be the primary driver.
  • The study examined both professional fees and facility fees to understand the effects of private equity acquisitions on the prices and volume of care.
  • The research highlights the importance of understanding the role of private equity in shaping the healthcare landscape.

Statistics:

  • $92: The increase in prices per claim after a private equity acquisition.
  • 28.4 percent: The percentage increase in prices after a private equity acquisition.
  • 78.1 percent: The increase in professional fees after a private equity acquisition.
  • 2015-20: The time period examined in the study.
  • 44(2): Expressing the issue number of the journal Health Affairs that published the study (215-223).

Sources:

  • Increases In Physician Professional Fees In Private Equity-owned Gastroenterology Practices. Health Affairs, 2025;44(2):215-223. Project Hope, 7500 Old Georgetown Rd, Ste 600, Bethesda, MD 20814-6133, USA.
  • Yashaswini Singh, Brown University, Providence, RI 02912, United States.

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