Trends in Private Equity Consolidation in Cardiovascular Care.

This cross-sectional study examines the growth in numbers and geographic locations of private equity acquisitions in cardiology across the US.

Life cycle of private equity investments in physician practices: an overview of private equity exits.

Private equity (PE) firms acquire and grow physician practices through add-on consolidation, generating outsized returns on the sale of the acquisition in 3-8 years ("exit"). Private equity's abbreviated investment timeline and exit incentives may deter long-term investments in care delivery and workforce needed for high-quality care. To our knowledge, there has been no published analyses of the nature or duration of PE exits from physician practices. We address this knowledge gap by using novel data to characterize PE exits from dermatology, ophthalmology, and gastroenterology, physician specialties with the largest number of acquisitions between 2016 and 2020. Of 807 acquisitions, over half (51.6%) of PE-acquired practices underwent an exit within 3 years of initial investment. In nearly all instances (97.8%), PE firms exited investments through secondary buyouts, where physician practices were resold to other PE firms with larger investment funds. Between investment and exit, PE firms increased the number of physician practices affiliated with the PE firm by an average of 595% in 3 years. Findings highlight the rapid scale of ownership change and consolidation under PE ownership and motivate evaluations by policymakers on the effects of PE ownership over the life cycle of PE investments.

Increases in Medicare Spending and Use after Private Equity Acquisition of Retina Practices.

PURPOSE: Private equity (PE) firms increasingly are acquiring physician practices in the United States, particularly within procedural-based specialties such as ophthalmology including retina. To date, the potential impact of ophthalmology practice acquisitions remains unknown. We evaluated the association between PE acquisition and Medicare spending and use for common retina services. DESIGN: Retrospective difference-in-differences analysis using the 20% Medicare fee-for-service claims dataset from January 1, 2015, through December 31, 2019. PARTICIPANTS: Eighty-two practices acquired by PE during the study period and matched control practices. METHODS: We used novel data on PE acquisitions of retina practices linked to the 20% sample Medicare claims data. Retina practices acquired by PE between 2016 and 2019 were matched to up to 3 non-PE (control) practices based on characteristics before acquisition. Private equity-acquired practices were compared with matched control practices through 6 quarters after acquisition using a difference-in-differences event study design. Data analyses were performed between August 2022 and April 2023. MAIN OUTCOME MEASURES: Medicare spending and use of common retina services. RESULTS: Relative to control practices, PE-acquired retina practices increased the use of higher-priced anti-vascular endothelial growth factor (VEGF) agents including aflibercept, which differentially increased by 6.5 injections (95% confidence interval, 0.4-12.5; P = 0.03) per practice-quarter, or 22% from baseline. As a result, Medicare spending on aflibercept differentially increased by $13 028 per practice-quarter, or 21%. No statistically significant differences were found in use or spending for evaluation and management visits or diagnostic imaging. CONCLUSIONS: Private equity acquisition of retina practices are associated with modest increases in the use of higher-priced anti-VEGF drugs like aflibercept, leading to higher Medicare spending. This finding highlights the need to monitor the influence of PE firms' financial incentives over clinician decision-making and the appropriateness of care, which could be swayed by strong economic incentives. FINANCIAL DISCLOSURE(S): Proprietary or commercial disclosure may be found in the Footnotes and Disclosures at the end of this article.

Factors Associated With Public Trust in Pharmaceutical Manufacturers.

This cross-sectional study examines how key demographic and predisposing factors are associated with consumer trust in pharmaceutical manufacturers.

Workforce Composition In Private Equity-Acquired Versus Non-Private Equity-Acquired Physician Practices.

Despite growth in private equity (PE) acquisitions of physician practices in the US, little is known about how changes in ownership influence workforce composition. Using clinician-level data linked to practice acquisition information, we estimated changes in clinician workforce composition in PE-acquired practice sites relative to non-PE-acquired independent practice sites for dermatology, ophthalmology, and gastroenterology specialties. We calculated a clinician replacement ratio (cumulative number of entering clinicians during 2014-19 divided by the cumulative number of exiting clinicians) across 213 PE-acquired practices and 995 matched non-PE-acquired practices. Using a difference-in-differences approach, we also examined practice-level changes in yearly clinician counts at PE-acquired practices before and after acquisition compared with non-PE-acquired controls. In aggregate and across the study period, the clinician replacement ratio was higher for PE-acquired practices compared with non-PE-acquired controls (1.75 versus 1.37), as well as within each specialty and clinician type (physician versus advanced practice provider). Relative to non-PE-acquired control practices, we also found significant yearly increases in the number of advanced practice providers at PE-acquired practices after acquisition. Taken together, these findings suggest differential changes in workforce composition at PE-acquired practices, especially a shift toward advanced practice providers for care delivery.

Association of Direct-to-Consumer Advertising of Prescription Drugs With Consumer Health-Related Intentions and Beliefs Among Individuals at Risk of Cardiovascular Disease.

Importance: Consumers in the US are exposed to unprecedented high levels of direct-to-consumer advertising (DTCA) for prescription drugs, yet there is limited evidence regarding their effect on health-related intentions and beliefs. Objective: To provide evidence on the association of DTCA for prescription drugs with consumer health-related intentions and beliefs. Design, Setting, and Participants: This cross-sectional study recruited participants from a nationally representative sample of individuals at high risk of cardiovascular disease. Participants were randomly assigned into 1 of 3 study arms: (1) exposure to DTCA for heart disease medications (treatment 1 [n = 926]), (2) exposure to DTCA for heart disease medications with price disclosure (treatment 2 [n = 921]), (3) and exposure to nonpharmaceutical advertising (control group [n = 902]). Each study arm viewed five 1-minute video advertisements, totaling 5 minutes of advertising exposure. The 2 treatment arms viewed pharmaceutical advertising videos for 4 heart disease medications, and the control arm viewed nonpharmaceutical advertising videos. Participants then completed a survey questionnaire to measure medication- and lifestyle-related intentions and health-related beliefs and perceptions. Exposures: Direct-to-consumer advertising for heart disease medications (treatment 1), DTCA for heart disease medications with price disclosure (treatment 2), and nonpharmaceutical advertising (control group). Main Outcomes and Measures: The primary outcomes included ordinal measures of medication- and lifestyle-related intentions, health-related beliefs, and brand perceptions. Results: Among the 2874 included participants (mean [SD] age, 53.8 [7.1] years; 1549 [54%] male) χ2 tests confirmed that there were no statistically significant differences in baseline demographic characteristics across study arms. There was a positive association between DTCA and medication-related behavioral intentions, including intention to switch medication (marginal effect [ME] = 0.004; P = .002) and engage in information-seeking behaviors (ME = 0.02; P = .01). There was no evidence that pharmaceutical DTCA discouraged use of nonpharmacological lifestyle interventions that can help manage heart disease (eg, diet and exercise), and DTCA exposure also had a positive association with consumers' favorable perceptions of pharmaceutical manufacturers (competence: ME = 0.03; P = .01; innovative: ME = 0.03; P = .008). There was no evidence for differential associations of price disclosures in DTCA. Conclusions and Relevance: In this cross-sectional study, results showed that brief exposure to pharmaceutical DTCA had a large and positive association with medication-related demand intentions with no offsetting negative spillovers on lifestyle-related intentions. Lack of associations with price disclosure in DTCA suggests that policy makers should consider alternative strategies to promote value-based decision-making for prescription drugs.

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization.

Importance: Private equity acquisitions of physician practices in the US have been increasing rapidly; however, the implications for health care delivery and spending are unclear. Objective: To examine changes in prices and utilization associated with private equity acquisitions of physician practices across multiple specialties. Design, Settings, and Participants: This was a difference-in-differences event study of US physician practices specialized in dermatology, gastroenterology, and ophthalmology that were acquired by private equity firms from 2016 to 2020. Within each specialty, each private equity-acquired (PE-acquired) practice was matched with as many as 5 control practices based on the preacquisition number of unique patients, encounters, risk score, share of services billed out-of-network, and spending. The PE-acquired practices were compared with matched controls through year 2 after acquisition, using a difference-in-differences event study. Data analyses were performed from March 2021 to February 2022. Exposures: Private equity acquisition of physician practices. Main Outcomes and Measures: Measures of spending and utilization, including the charge and price (amount paid) per claim, new and unique patients, and total encounters. Results: Compared with the 2874 control practices, the 578 PE-acquired physician practices exhibited an average increase of $71 (+20.2%) charged per claim (95% CI, 13.1%-27.3%; P < .001) and $23 (+11.0%) in the allowed amount per claim (95% CI, 5.6%-16.5%; P < .001). The PE-acquired practices increased their numbers of unique patients seen by 25.8% (95% CI, 15.8%-35.6%; P < .001) compared with control practices, driven by a 37.9% increase in visits by new patients (95% CI, 25.6%-50.2%; P < .001). In aggregate, their volume of encounters increased by 16.3% (95% CI, 1.0%-32.0%; P = .04) compared with the control group, with a 9.4% increase in the share of office visits for established patients that were billed as longer than 30 minutes (95% CI, 1.7%-17.0%; P = .02). No statistically significant changes in patient risk scores were found between PE-acquired practices and controls. Within specialties, we found modest differences along selected outcomes. Conclusions and Relevance: In this difference-in-differences study, private equity acquisition of physician practices in dermatology, gastroenterology, and ophthalmology were associated with differential increases in allowed amount and charges per claim, volume of encounters, and new patients seen, as well as some changes in billing and coding.

Geographic Variation in Private Equity Penetration Across Select Office-Based Physician Specialties in the US.

This cross-sectional study examines geographic variations in private equity firm acquisitions of US physician practices across 6 specialties.

Site-based payment differentials for ambulatory services among individuals with commercial insurance.

OBJECTIVE: To compare prices paid by commercial insurers for ambulatory services in physician office and hospital outpatient settings. DATA SOURCES: MarketScan Commercial Claims and Encounters database obtained from Truven Health Analytics. STUDY DESIGN: We examined ambulatory service claims for a sample of privately insured individuals who were continuously enrolled in a health maintenance organization plan, preferred provider organization plan, high-deductible/consumer-driven health plan, or exclusive provider organization plan in 2018. We categorized services into five categories: Evaluation & Management, Medical Services & Procedures, Pathology/Lab, Radiology, and Surgical. We identified services commonly provided in both outpatient and office settings and computed the price differential between outpatient and office services overall and for each service category, controlling for observable patient characteristics and geography. DATA COLLECTION: We examined 89 services (defined by Current Procedural Terminology [CPT] code) that were provided in both office and outpatient settings in our sample (102.7 million claims, 8.3 million individuals). PRINCIPAL FINDINGS: Adjusting for patient and geographic characteristics and across all services, total payment for an ambulatory service was, on average, 145% higher in a hospital outpatient department than the same service in a physician office. Out-of-pocket spending was 109% higher. Price differences between outpatient and office services were highest for pathology/laboratory services. Patients receiving services in outpatient departments had higher mean risk scores and received more services on the date of their visit (in addition to the index CPT being studied) than patients receiving the same index CPT in a physician's office. CONCLUSIONS: Payments in hospital outpatient departments were significantly higher than payments for the same services in physician offices among commercially insured patients. Policies such as site-neutral payment would lower costs and could reduce incentives for further consolidation in health care markets. Care must be given to adjusting for patient severity across settings.

Participation, Pricing, and Enrollment in a Health Insurance "Public Option": Evidence From Washington State's Cascade Care Program.

Policy Points Policymakers considering introduction of a health insurance "public option" to lower health spending and reduce the number of uninsured can learn from Washington State, which offered the nation's first public option ("Cascade Care") through its state exchange in 2021. This article examines insurer participation, pricing, and enrollment in the Washington public option. The public option was the lowest-premium standard silver plan in 9 of the 19 counties in which it was offered. Cascade Care is available solely through private insurers. Voluntary participation of these insurers and uncertainty about the willingness of providers to participate may have hindered greater premium reductions and enrollment in the public option's first year. CONTEXT: State and federal policymakers considering introduction of a health insurance "public option" can learn from Washington State, which established the nation's first public option, with coverage beginning in January 2021. Public option plans were offered voluntarily by private insurers through the Washington Health Benefit Exchange and were subject to state-mandated plan design and payment requirements. METHODS: We used plan data from the Washington Health Benefit Exchange, linked to data from the US Census Bureau, the American Hospital Association, and InterStudy. We compared geographic availability and premiums of, and enrollment in, public option and non-public option plans, as well as characteristics of counties where the public option was available and counties where the public option was the lowest-premium plan. FINDINGS: At least one public option plan was available in 19 of 39 counties and was the lowest-premium option in 9 of the 19 counties where it was available. Five insurers offered public option plans, including one new entrant to the state and one new entrant to the Exchange. While public option availability was more common in counties where the Exchange was bigger and more competitive, public option plans had the lowest premium in smaller, less competitive counties. In the first year, 1% of enrollees selected the public option, in part due to automatic reenrollment of the majority of returning enrollees in their 2020 plan. CONCLUSIONS: Public option plans offered a low-premium choice in counties that otherwise had fewer affordable plans, but voluntary participation of insurers and providers and accompanying uncertainty about participation hindered widespread and substantial premium reductions. States should consider tying public option participation by insurers and providers to other state programs and using decision support tools to promote active enrollment. Federal policymakers can support state efforts while considering establishment of a national public option.