In 2022, Medicare spending for beneficiaries treated in private physician practices backed by private equity was, on average, 9.8% lower compared to those treated in hospital-affiliated practices.
That’s according to a recent study conducted by Avalere, commissioned by the American Independent Medical Practice Association (AIMPA). The study revealed significant cost savings and reduced health care utilization among Medicare beneficiaries treated by private equity-affiliated physician practices.
AIMPA is a national advocacy organization formed to support independent medical practices across various specialties. Avalere is a health policy and consulting firm based in Washington, D.C.
The report, titled “Medicare Service Use and Expenditures Across Physician Practice Affiliation Models,” analyzed data across five key specialties: cardiology, gastroenterology, medical oncology, orthopedics and urology.
Additionally, patients under private equity-affiliated physicians experienced 13.5% fewer inpatient hospital days and 7.9% fewer emergency department visits compared to their counterparts in hospital-affiliated practices.
The findings stand out because in many cases, private equity has been linked with a decline in patient outcomes. And as past reports, investigations and case studies on the topic have mounted, state and federal policymakers have increasingly targeted PE’s role in health care.
For ambulatory surgery center (ASC) operators, the results of the AIMPA could signal an opportunity to align with private equity-supported practices, with caution.
Researchers encouraged policymakers to support these evolving models to optimize Medicare spending and patient care outcomes.
“Independent physicians have long maintained that we provide high-quality care at lower cost than our physician colleagues who are affiliated with hospitals or vertically integrated insurers,” Dr. Paul Berggreen, a gastroenterologist and president and board chair of AIMPA, said in a press release. “This study supports our hypothesis — and illustrates how private equity investment can be a force for good in our health care system.”
