In an article published by Forbes, Bass, Berry & Sims attorney Angela Humphreys discussed the impact of private equity (PE) investment in physician practices. Due in part to the shift toward value-based care, physician practice management consolidation is steadily increasing over the last few years with PE firms investing heavily in this sector. Some industry experts worry about the impact that PE investment will have on patient care in the long term. However, there are laws that allow for the business benefits of consolidation while leaving the physician solely in charge of patient care.
As Angela stressed, “Those laws are very clear. No one can have control over the independent clinical judgment of the physician.” She further points out that “in many cases, PE firms utilize a PPM model to acquire the non-clinical assets of a physician practice and enter into a management agreement with the practice. The physician entity holds the payer contracts, provides patient care, and employs the physicians, nurses and clinical personnel.”
The full article, “Why Are PE Firms Hot for Physician Practices,” was published by Forbes on August 30, 2019, and is available online.