The 3 factors PE-acquired practices have in common

A study published in JAMA examined the practice consolidation landscape in regard to private equity-related acquisition from 2013-16.

Researchers examined 355 physician practice acquisitions pulling a number of related stats. In total, PE-related acquisition activity is increasing. In 2013, there were 59 acquisitions and in 2016, there were 136.

Here are the three things every practice had in common:

1. Acquired practices had the following average statistics:

  • Four practice sites
  • 16.3 physicians
  • 6.2 physicians per site

2. Of these practices, 81.4 percent accepted new patients, 83.4 percent accepted Medicare patients and 60.3 percent accepted Medicaid.

3. Exactly 43.9 percent of acquired practices were in the Southern U.S.

Researchers warned: "Private equity firms expect greater than 20 percent annual returns, and these financial incentives may conflict with the need for longer-term investments in practice stability, physician recruitment, quality, and safety. There may be additional pressures to increase revenue streams (eg, elective procedures and ancillary services), direct more referrals internally, and rely on lower-cost clinicians."

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