According to a study in Health Affairs Scholar, over half of physician practices acquired by private equity firms changed ownership within three years, often being sold to other private equity firms. It’s important to note that private equity investors typically aim for returns within three to eight years, making exits a natural part of their investment strategy. Exits commonly occur through secondary buyouts to other private equity firms, reflecting a ‘buy to sell’ mindset. This mindset, focused on financial returns, may not always align with a patient-centric approach to healthcare.

The study focused on private equity exits in dermatology, ophthalmology, and gastroenterology practices. Between 2016 and 2020, 807 practices in these specialties were acquired by private equity firms. Of these, just over half experienced an exit, with almost all exits resulting in secondary buyouts to other private equity firms. It’s worth noting that the financial performance of these practices varied significantly before and after the acquisitions, with some experiencing a boost in revenue and others struggling to maintain profitability.

As highlighted by the study, the rapid turnover in ownership is a pressing issue that raises concerns about the long-term impact on patient care. Many believe the sharp increase in physician practices affiliated with private equity firms underscores the need for immediate and thorough antitrust scrutiny and ownership transparency. This is crucial to assess the long-term effects of private equity consolidation on healthcare delivery.