Hundreds of private equity-acquired cardiology sites emerged from the pandemic
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Key takeaways:
- Nearly 95% of private equity purchases of cardiology clinics since 2013 occurred from 2021 onward.
- Acquired clinics were most likely to be in the wealthiest communities in the U.S. South and West.
Hundreds of private equity acquisitions of cardiology clinics occurred in the later years of the COVID-19 pandemic and in the wealthiest of U.S. communities, researchers reported.
“Policymakers and clinicians have raised concern about the growing presence of private equity in other medical specialties. Although cardiology is an attractive target for private equity firms, little is known about the number and types of practices that are being acquired,” Rishi K. Wadhera, MD, MPP, MPhil, cardiologist at Beth Israel Deaconess Medical Center and associate professor of medicine at Harvard Medical School, said in a press release. “Private equity acquisitions in other specialties have been shown to decrease quality and increase costs, so it is critical to understand the impact on cardiology.”
The findings were presented at the AcademyHealth Annual Research Meeting and simultaneously published in the Journal of the American College of Cardiology.
Wadhera, Victoria L. Bartlett, MD, internal medicine resident at Brigham and Women’s Hospital, and colleagues utilized manually collated transaction data from the Irving Levin Associates Health Care M&A and PitchBook databases to identify private equity acquisitions of outpatient cardiology practices from 2013 to September 2023 in the U.S. Transactions where “platform practices” were used to acquire smaller practices on behalf of private equity firms were also included in the analysis.
In addition, the 2023 CMS National Downloadable File was used to determine the denominator of total outpatient cardiology practices in the U.S., and the American Community Survey was used to identify community characteristics where each site was located.
‘Is it just about the money?’
During the study period, there were 41 acquisitions of outpatient cardiology practices, totaling 342 private equity acquisitions of cardiology clinics, 94.7% of which occurred from 2021 to 2023.
The states with the highest number of private equity acquisitions were Florida with 60, followed by 53 in Texas and 33 in Arizona, according to the study.
Cardiology clinics in the South (adjusted RR = 3.17; 95% CI, 2.14-4.7) and West (aRR = 2.6; 95% CI, 1.67-4.04) were more likely to be acquired by private equity firms compared with the Northeast.
The researchers identified no significant association between community-level proportion of residents aged 65 years or older, proportion of racial or ethnic minorities, educational attainment or rurality on the likelihood of private equity acquisition.
The only significant predictor for acquisition was community-level affluence, with cardiology clinics in communities with the highest poverty levels being less likely to be acquired compared with those in the wealthiest communities (aRR = 0.61; 95% CI, 0.4-0.94).
“Is it just about the money or is the move to private equity a symptom of more foundational problems with the current practice of medicine and cardiology?” Edward T.A. Fry, MD, MACC, chair of the Ascension Health National Cardiovascular Service Line and past president of the ACC, wrote in a related editorial. “Clinicians, health system administrators, policymakers and the public need to define the elements of clinical practice that encourage a growing number of cardiologists to seek out alternative employment models. Addressing them will be necessary to truly transform care and promote equity and value.”
From the ‘perfect storm’ of COVID-19 emerged private equity
In the editorial, Fry discussed how the COVID-19 pandemic ushered in the wave of private equity acquisitions since 2021 and the lack of data on how this may impact CV care.
“Health systems’ financial health worsened, with 50% operating in the red in the years post-COVID. Facing these realities, systems began to weigh the value of ‘owning’ physicians, wary of increasing ‘physician losses’. ... Cuts to physician reimbursement by payers, both real and relative to escalating inflation, a growing work force crisis with a net loss of practicing cardiologists, an intensification of the employee-employer mindset, and a sense of vanishing professionalism and self-determination added to a feeling of disengagement,” Fry wrote. “Into this perfect storm walked ‘Private Equity’ (PE). ... Very explicitly, the goal of PE in health care is to generate a specific near-term and long-term return on investment to the stakeholders by delivering a competitive health care value to patients and payers. This is big business with an estimated $750 billion invested since 2014.
“Clearly more data and investigation are needed to understand the growing impact of PE in cardiovascular practice and especially to understand the impact on clinical quality, access to care, patient experience, long term physician satisfaction, total cost of care, coordination of comprehensive health services and overall value,” he wrote. “In response to a Request for Information on Consolidation in Healthcare Markets from the U.S. Federal Trade Commission (FTC), the American College of Cardiology recommended that additional research be done on the impact of PE with respect to competition, patient care and safety, transparency and accountability, and effective regulation to align with the interests of patients and the public.”
References:
- Bartlett V, et al. J Am Coll Cardiol. 2024;doi:10.1016/j.jacc.2024.06.011.
- Fry ETA. J Am Coll Cardiol. 2024;doi:10.1016/j.jacc.2024.06.012.
- Study: Private equity acquisitions in cardiology on the rise. https://www.eurekalert.org/news-releases/1049788. Published June 30, 2024. Accessed July 1, 2024.
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Bartlett VL, et al. Healthcare financing, payment, and privatization. Presented at: AcademyHealth Annual Research Meeting; June 29-July 2, 2024; Baltimore.
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