F$ck This: Physician Exodus After Private Equity Exit.
New data sheds light on the pernicious role of private equity acquisitions.
Yep. We now have definitive evidence that Private Equity (PE) in healthcare does harm to physicians work life, such that physicians who work for practices rolled up by PE leave their jobs at vastly higher rates then before the acquisition.
Private Equity acquisitions suuuuuck. They suck for those who loved Red Lobster. They sucked for Joanne Fabrics just yesterday. They sucked for the entire specialty of Emergency Medicine. Private Equity, the hungry terminates of finance, who never saw a foundation they didn’t feel hungry enough to gnaw through.
Private Equity (PE) is not a firm, It’s not a low ranking military officer. It’s a giant pool of money—often your money, if you have a pension—that is deployed in higher risk investments than the stock market, and lower risk than Venture Capital.
PE funds share a buisness model. As I’ve explained earlier:
Step one: steal underpants
Step two: ?
Step three: profits
Well, thanks to the Journal of the American Medical Association—not a friend of Private Equity in healthcare—we have data on how pernicious it is to have a practice acquired by PE. Previous articles have covered data about the increase in sentinel events and other adverse outcomes. I have written about the catastrophic EM match last year after PE rolled up most of the speciality (over 550 spots were unmatched, an absurdly high number), and, of course, the subsequent collapse of PE funded Emergency Medicine staffing companies.
This month, scholars wrote a paper that looks at what happened before and after PE Exit…
Sale of Private Equity–Owned Physician Practices and Physician Turnover
Quite the journal article title. It was published in JAMA health forum, a diffusion brand of the much higher impact factor JAMA.
Let's dig in. And yes, I am going to make you review table one with me anyway. This is not a break from science, people.
Again, this is an observational study, not a randomized control trial, so we're just looking to see how good the matching is, not looking to determine whether a randomization was successful. The groups are only trivially different, with there being a higher likelihood of older physicians and practices in which there was a private equity exit, which shouldn't surprise anybody.
The sample spans small, medium, and large practices. It spans specialties. If you are thinking this looks like a case control study, you are correct, the disease state in this case is private equity buying your practice.
In this case-control study, we assessed the association between PE exits and physician employment decisions by comparing changes in employment for physicians who worked in PE-exiting practices (treatment group) with changes in employment during the same period for matched physicians who did not work in PE-exiting practices (control group). We studied employment changes from 2 years before to 2 years after exit. Outcomes included staying (continue billing from the same practice), working elsewhere (stop billing from the same practice but continue billing from another), and retirement (no longer observed to be practicing in our data). Institutional review board approval was not sought because, based on guidance from the Harvard Business School, this study did not constitute human subjects research. This study aligns with the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guideline.
The primary outcome they're looking at is change in employment—do you stay at the practice after private equity buys it, or do you flee like rats from a sinking ship? Preview: it’s the latter. And, in honor of private equity, and in attempt to squeeze every last penny out of my readers, I'm gonna put a paywall here. If this were a PE rollup, there would be like 10 paywalls. By the way, if you want to get below the paywall, for most of my articles, all you have to do is share the newsletter a trivial amount of times, and that gets you free access to the paid content, because I just don't care enough about money to make a real barrier to your entry here. I'm not gonna be sad if you decide to pay me, because I do so much writing and enrich your day, but if you just wanna share it, that's good too. This high-end sushi meal is not gonna pay for itself.
