Private Equity-Acquired Physician Practices And Market Penetration Increased Substantially, 2012-21

Area of Science:

• Health economics
• Healthcare market analysis
• Physician practice management

Background:

• Private equity (PE) acquisitions of physician practices have surged.
• Concerns exist regarding PE market penetration and its impact on healthcare quality and prices.
• Limited data exists on the extent of PE control in local healthcare markets.

Purpose of the Study:

• To quantify the local market share of private equity firms in physician specialties.
• To assess the concentration of PE ownership within Metropolitan Statistical Areas (MSAs).

Main Methods:

• Linked data on PE acquisitions with physician data.
• Assessed market share using full-time-equivalent physicians.
• Analyzed ten physician specialties at the MSA level.

Main Results:

• PE-acquired physician practice sites grew from 816 (119 MSAs) in 2012 to 5,779 (307 MSAs) in 2021.
• Single PE firms held over 30% market share in 108 MSA specialty markets.
• Single PE firms exceeded 50% market share in 50 of these markets.

Conclusions:

• Private equity firms wield substantial market share in numerous local healthcare markets.
• Findings indicate potential threats to competition in healthcare.
• Increased scrutiny by regulatory bodies like the FTC and state agencies is recommended.