Low-Value Care Following Hospital and Private Equity Acquisition in Primary Care

Corporate employment of primary care physicians by hospitals and private equity-backed organizations has increased in recent years, raising concerns that the financial incentives of corporate employment will incentivize provision of low-value care. In this study, we use a difference-in-differences design to examine whether hospital and private equity (PE) acquisitions of primary care practices between 2018 and 2021 change the provision of low-value services within the Traditional Medicare population compared with independent primary care practices. Overall, one-third of Medicare beneficiaries with PE-affiliated primary care providers (PCPs) received low-value services relative to one-quarter of beneficiaries with hospital-affiliated or independent PCPs. We find that hospital and PE acquisitions in primary care did not result in significant changes to the likelihood or number of low-value services received by Medicare patients. As consolidation re-shapes the U.S. health care system, ongoing evaluation of hospitals, health systems and PE-backed organizations remains critical.