Private equity in cardiology: 4 key takeaways from a 10-year analysis
Private equity (PE) firms acquired nearly 350 cardiology clinics in the last decade, according to new data published in the Journal of the American College of Cardiology.[1] This comes at a time when many healthcare stakeholders and government officials feel uneasy about the rising influence of PE.
The new research was first presented Sunday, June 30, at the AcademyHealth 2024 Annual Research Meeting in Baltimore.
“Policymakers and clinicians have raised concern about the growing presence of PE in other medical specialties,” senior author Rishi K. Wadhera, MD, MPP, MPhil, a cardiologist at Beth Israel Deaconess Medical Center and associate professor at Harvard Medical School in Boston, said in a prepared statement. “Although cardiology is an attractive target for PE firms, little is known about the number and types of practices that are being acquired. PE acquisitions in other specialties have been shown to decrease quality and increase costs, so it is critical to understand the impact on cardiology.”
Tracking PE acquisitions in healthcare can be challenging. In fact, many PE firms have stopped promoting these deals with press releases, social media posts or public announcements of any kind. For this reason, Wadhera et al. explored multiple resources—including online archives, U.S. Centers for Medicare and Medicaid Services data and the American Community Survey—and confirmed each finding, working to ensure its calculations accurately represented the state of the industry.
4 key takeaways from new Journal of the American College of Cardiology research:
1. Overall, from January 2013 to September 2023, PE firms or PE-backed physician management groups acquired 41 outpatient cardiology practices. This corresponded to a total of 342 outpatient cardiology clinics. Many clinics were acquired multiple times, the authors noted, which is fairly common on the world of PE investments and acquisitions.
“It is concerning that nearly one in four PE-acquired cardiology clinic sites were acquired more than once over the 10-year study period,” the authors wrote. “This is a known strategy employed by PE firms, who favor short-term investments over three- to seven-year time periods. Shorter investment timelines incentivize changes that maximize profits quickly, but may not increase quality—such as charging higher prices, increasing patient volume and replacing physicians with advanced practice providers—all of which have been observed in other specialties.”
2. A majority (94.7%) of acquisitions occurred from 2021 to 2023.
3. Twenty different states have been home to cardiology clinics acquired by PE. Florida, with its massive number of healthcare providers and aging population, was the state with the most (60) PE acquisitions over the course of the study. Texas and Arizona were Nos. 2 and 3 with 53 and 33 acquisitions, respectively.
4. Cardiology clinics in wealthier communities were much more likely to be acquired with PE investments than those located in more high-poverty communities.
“As the number of cardiology acquisitions by PE increases it will be critical to monitor the effects on procedural utilization, quality and outcomes for patients with cardiovascular disease,” the authors concluded.
Michael has more than 18 years of experience as a professional writer and editor. He has written at length about cardiology, radiology, artificial intelligence and other key healthcare topics.