The American College of Physicians (ACP) recently issued a new position paper entitled “Regulatory Framework for Private Equity and Corporatization in Health Care” that examines the impact of private equity on healthcare costs, access, equity, innovation, and clinical autonomy. The ACP is the largest specialty organization in the U.S., with 163,000 members including internal medicine physicians, subspecialists, and medical students.
Five years ago, the ACP’s position paper entitled “Financial Profit in Medicine” explored the impact of corporate interests and private equity investments in the healthcare industry. Since then, such investments have grown exponentially in hospitals, medical practices, dentistry, and other ancillary providers, and there has been growing concern at the federal and state levels as to the potential negative impact on pricing, quality of care, and working conditions for healthcare professionals (as discussed here).
The ACP’s new position paper calls for increased scrutiny by federal and state lawmakers and policymakers in the following key areas:
- Protection of clinical autonomy by strengthening prohibitions on the corporate practice of medicine, self-referrals, and restrictive covenants;
- Requiring increased transparency of private equity investments and financials;
- Increasing scrutiny or False Claim activities by private equity-sponsored providers and imposing liability on individual investors and owners; and
- Performing studies on how private equity-sponsored providers influence beneficiary enrollment and spending, physician retention/turnover, and staffing level.
The new position paper reflects a growing call for review of how private equity may negatively affect the healthcare delivery system. As we discussed previously, the benefits of private equity investment, including access to capital for new technology and bringing expertise to healthcare, should not be overlooked.
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