Private equity transforms workforce stability in physician-owned health practices

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New research shows that private equity firms that acquire physician-owned medical practices will experience greater workforce displacement and greater reliance on medical practice providers. advanced professions—such as physician assistants and nurses—not physicians.

This study is the first to describe the change in labor force composition after the acquisition of private equity. It was published today in the January issue of the magazine health issues by researchers at Oregon Health & Science University, University of Chicago, Harvard University, and Johns Hopkins University.

Impacts occurring in the context of shortages are well documented overall Health care workforce exacerbated by the COVID-19 pandemic.

“We should really pay more attention to how these panoramas practice delivery shifts are affecting physicians,” senior author Jane Zhu, MD, assistant professor of medicine (Internal general and geriatrics) at the OHSU School of Medicine in Portland. “Our numbers are finite. If the measures we found in this study show displeasure among doctors, that’s ultimately another burden on the workforce.” is on the verge of exhaustion.”

The findings are the latest in a line of research showing that private equity firms are under increasing pressure to maximize profits.

First author Joseph Dov Bruch, Ph. D., assistant professor of public health sciences at the University of Chicago. “The fact that we observed greater clinician substitution in private equity practices compared with non-private equity practices suggests that the private equity business strategy may differ from the strategies of traditional practice owners.”

The researchers did not specifically examine the impact of changes in workforce composition on health outcomes or patient carealthough the study cites previous research showing that caring for patients is more difficult with a more temporary workforce.

“A more stable workforce is associated with better health results for patients, improved quality metrics and reduced resource usage,” they wrote.

The study identified 213 private equity practices in dermatology, ophthalmology, and gastroenterology, and compared them with 995 physician-owned practices in those same specialties. They found that physicians in privately acquired practices were more likely than their counterparts in physician-owned facilities to enter and leave the practice.

The study also noted a growth in advanced practice provider staff in private equity-practice get.

“Private equity maximizes profits by increasing revenue or cutting costs,” Zhu said. “Moving to backend and enhanced service providers is one way to achieve both.”

In addition to Zhu and Bruch, coauthors include Canyon Foot of OHSU; Yashaswini Singh, MPA, and Daniel Polsky, Ph.D., MPP, of Johns Hopkins; and Zirui Song, MD, Ph.D., of Harvard.

More information:
Workforce composition in private equity–purchased versus private equity–physician practice, health issues (2023). DOI: 10.1377/hlthaff.2022.00308

quote: Private equity changes workforce stability in physician-owned health facilities (2023, January 9) retrieved January 10, 2023 from https://medicalxpress .com/news/2023-01-private-equity-workforce-stability-physician-owned.html

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