Health Care Access & Coverage

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Chart of the Day: What’s All This Brouhaha? Today’s Private Equity Purchases of Physician Practices Look Much Like the Past

Penn LDI Study Provides Historical Analysis and Insight for the Future

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The growth of private equity investment in health care is facing sharp scrutiny from investors, regulators, and the public. Some view private equity as a key to transforming the U.S. health system. Others raise concerns that profits for corporate investors will be at the expense of patients’ health, workers’ safety, and affordability. LDI Senior Fellows Mark V. Pauly and Lawton Robert Burns argue that we have seen this movie before. Looking at past private equity purchases will help us understand the future. 

In their study, published in the Journal of Health Politics, Policy, and Law, they identify two historical waves of private equity investment in physician practices—in the 1990s and from the passage of the Affordable Care Act in 2010 to the present. They then assess the similarities between the investment goals of each wave—shown in the table above. Pauly and Burns say that strategies across private equity investment have largely stayed consistent. However, the investigators say there’s “less public information on firm performance” today. So, they argue, the current “brouhaha” should be tempered by past experience.

The study, “Equity Investment in Physician Practices: What’s All This Brouhaha?,” was published on February 7, 2024 in the Journal of Health Politics, Policy, and Law. Authors include Mark V. Pauly and Lawton Robert Burns.

Author

Miles Meline

Miles Meline, MBE

Policy Coordinator

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