Abdelhadi et al. pinpointed practices acquired by PE between 2012 and 2021 using databases from Irving Levin Associates and Pitchbook. They supplemented the analysis with further information from news outlets, press releases and other industry reports. Along with radiology, the authors also investigated primary care, dermatology, OB/GYN, gastroenterology, ophthalmology, oncology, urology, orthopedics and cardiology.
PE-acquired practices were less likely to employ female physicians than their counterparts (at 37% vs. over 40%). And nearly half of all PE acquisitions across the 10 specialties occurred in the South (at 48%). Private equity also upped the number of metropolitan areas targeted during the study period, rising from 119 MSAs in 2012 to 307 in 2021.
The study sample included 19,908 radiologists, with 1,181 working in private equity-acquired entities (for a market penetration of 5.93%). A total of 4,991 radiology practice sites were acquired by other non-PE entities during the study period, accounting for 3.8% of the 131,552 total such acquisitions across all specialties examined. Out of all 1,094 private equity acquisitions, dermatology saw the largest share of ownership changes at 34%, followed by ophthalmology (25%) and gastroenterology (11%).
“We found that specialties such as primary care, obstetrics-gynecology, radiology, orthopedics, urology, and oncology also showed considerable increases from 2012 to 2021,” the authors noted. “Acquisition of these physician practices may be attractive to PE firms because of the fragmentation of the practices and increasing patient demands as the result of an aging population and rising private insurance coverage.”
Abdelhadi and co-authors also highlighted the high market share held by other non-PE entities in radiology. However, they find the concentration of market power among private equity “more problematic” for various reasons.
“PE firms tend to prioritize short-term profit maximization over long-term investment in patient care and infrastructure, implement aggressive acquisition strategies that may curtail patient choice and competition, use complex financial structures and leverage to finance acquisitions, and possess limited experience in the healthcare industry—all of which may lead to difficulties in managing and enhancing patient care,” they noted.
You can read much more, including potential study limitations, at the link below.
