I Can Haz Your Doctor's Office: Private equity buying up primary care practices

[marmar]

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Cross posted from the Health Care Renewal website


There are still some idealistic physicians who enter primary care practice as a calling.

The usual informal definition of primary care is care which is continuous, coordinated, comprehensive and compassionate. The official definition used by the American Academy of Family Physicians (AAFP) is:

Primary care is that care provided by physicians specifically trained for and skilled in comprehensive first contact and continuing care for persons with any undiagnosed sign, symptom, or health concern (the ‘undifferentiated’ patient) not limited by problem origin (biological, behavioral, or social), organ system, or diagnosis.

Primary care includes health promotion, disease prevention, health maintenance, counseling, patient education, diagnosis and treatment of acute and chronic illnesses in a variety of health care settings (e.g., office, inpatient, critical care, long-term care, home care, day care, etc.). Primary care is performed and managed by a personal physician often collaborating with other health professionals, and utilizing consultation or referral as appropriate.Primary care provides patient advocacy in the health care system to accomplish cost-effective care by coordination of health care services. Primary care promotes effective communication with patients and encourages the role of the patient as a partner in health care.

Private Equity Firms are Buying Out Primary Care Practices

However, an article this week in Modern Healthcare described how primary care in the US is getting a rude surprise. Apparently, primary care practices are now “in play,” ...................(more)

http://www.nakedcapitalism.com/2015/04/barbarians-gates-private-equity-puts-primary-care-play.html

[melm00se]

1. The real question is

why are these private equity firms are buying up these practices.

The answer is really quite simple and driven by 2 things(and is an aspect of health care that must be addressed):

The number of primary care physicians is projected to increase by 8% between 2010 and 2020

The demand for primary care physicians is projected to increase by 14% over the same period of time.

Source

The supply and demand curves that determine pricing are indicating that there is a gap here that will make primary care practices, potentially, more profitable (more demand than supply). THIS is why private equity firms are seeing an investment opportunity.

As it takes 7 years to grow a physician (4 years of medical school + 3 years of residency) + the aging of the American population, the spread between supply and demand isn't going to shrink by any appreciable margin (if at all) in the foreseeable future unless something changes.

[dixiegrrrrl]

9. Well, that and the fact that the medical prices have increased so dramatically.

Private equity would not be interested unless they could make huge profits.

Once they start owning medical clinics, they will also start decreasing costs by pushing for less qualified experienced staff, as has been done in hospitals.
Look for HB-1 hires from overseas, for example.

[melm00se]

11. The profits

are driven by the spread between supply and demand.

H1B visas and physicians is an interesting situation as physicians have to be licensed. State licensing boards can throw a monkey into the wrench for an H1B visa candidate.

[jwirr]

2. So how is this going to change the way we get medical care? Are they going to ration it? Or are we

all going to see the doctor for a few minutes while the nurse does most of the interview? How are things going to change. Greed and medicine do not work together in my mind.

[Hoyt]

3. Hospitals have been doing this for years, and for much the same reasons.

[Doctor_J]

4. The biggest cash cow now available. The "shareholders" will insist that costs (care) be cut to the

bone. They will also instigate unmanageable cheating, fraud, austerity measures, and every manner of profit margin boosting they can think of, daring the government to catch them and "clients" to find something better. Think the insurance companies can take "only" 20%? That's the legal part. They will steal another 10%.

Two things

1. This is not "in spite of" Heritage/Obamacare. It's part of it, baked in and inextricable. It will get worse until we enact SP, which at the moment looks to be "never".
2. Education is next, then SS

[Sunlei]

6. I wish people would start to post their medical bills and RX drug cost receipts.

[Sunlei]

5. it's the gov. subsidities paid for our health insurance.Mine is Humana, they got about 8k in gov. $

about 8k in Federal dollars Humana has received, couple thousand in premiums I paid. I've never even been to see the Doctor.

It is good to have insurance I can afford. The huge bad side is restricted to one brand new HUGE facility with one Doctors name stamped on my card as primary care Doctor.

Our insurance should be good anywhere in the USA!

These insurance Corps are making huge profits off the 'Free Gov. money"

[1939]

7. One of the reasons docs are selling out

They are tired of the paperwork of running an office. They would rather be an employee/partner and let someone else supervise and administer the employees. That way they can just see patients.

[MineralMan]

8. I long ago stopped going to solo practice physicians.

Instead, I go to a multi-specialty clinic, where I have selected a primary care physician with whom I am comfortable. If a consultation with a specialist is required, I see another physician at that clinic or another one in the same system. I have access to email visits, if needed, and am able to email questions to my PCP, which he answers the same day. I can almost always get a same day appointment, and the clinic also operates as an after-hours urgent care clinic.

They welcome my Medicare and supplemental insurer, so all of my visits are covered and there is no co-pay, since the clinic is in my supplemental insurance's network. I get superior care and have to visit one place to cover all of my needs. This is how healthcare should work.

That said, I am in a major metro area, so there is substantial competition among these clinics. In smaller communities or rural areas, the same type of clinic may not be as available. It's one reason I live where I live. Solo practices PCPs spend far too much time dealing with non-medical stuff, in my opinion. My internist, who is my PCP, spends as much time with me as is needed and never rushes me through an appointment.

[Hangingon]

10. We have been without a primary care physician for 5 months.

Our PCP and his partners dissolved their clinic in December. Ours and another set up a concierge practice - $1800 per patient per year no insurance or Medicare taken. The other went straight fee for services with no insurance or Medicare taken. Other physicians are following the concierge or fee for pay models. We have applied with several traditional practices but have found no one. Physicians are beginning to be choosy about which insurance they take. Medicare is slow pay and the fees are low. It looks like we will have to pay the $3,600 for both of us or do without.