Impact of Private Equity on Primary Care Practices

Researchers at Brown University's School of Public Health have conducted a groundbreaking study using Medicare claims data to evaluate the impact of private equity acquisitions on primary care practices. The study, published in Health Affairs, reveals that such acquisitions result in increased patient volume, enhanced service provision, and significant staff expansion.

Led by Assistant Professor Yashaswini Singh, the research highlights that the relationship between private equity ownership and patient care is complex, influenced by financial incentives and regulatory payment policies. Analyzing 225 primary care practices acquired by private equity firms from 2016 to 2022, the study compares them with independently owned counterparts.

Key findings reveal that private equity-owned primary care practices see approximately 11% more patients and deliver 13% more services per patient, primarily due to an uptick in preventive care services such as lab tests and health screenings. Medicare annual wellness visits have increased by over 20%, signifying a strong emphasis on preventive healthcare strategies.

Unlike other healthcare settings influenced by private equity, primary care practices have not reduced staffing levels. Instead, they expanded their teams, hiring 17% more physicians and 40% more nurse practitioners and physician assistants. This change suggests that the additional workload arising from the increased services and patient visits was efficiently managed through a larger workforce.

Singh advises caution in generalizing the effects of private equity across different healthcare settings, noting the potential benefits and challenges. While the study focuses on Medicare patients and does not assess long-term improvements in patient health, it identifies areas for further research. Supported by Arnold Ventures and the Commonwealth Fund, this study adds valuable insights into the evolving role of private equity in healthcare, emphasizing the importance of tailored approaches based on specific market incentives and conditions.