Federal Investigation into Private Equity, Consolidation in Medicine
Three federal agencies are investigating the impact of private equity ownership and the broader consolidation of healthcare organizations on patient care and costs, prompting a wave of concern among physicians. According to Rhonda Wright, MD, from Brookhaven, Georgia, the influence of private equity has led to deteriorating conditions in hospitals and medical practices, particularly affecting hospital-based physicians and emergency rooms. Dr. Wright points out that one in four emergency rooms is now understaffed due to private equity firms, resulting in increased wait times, compromised patient care, and elevated costs.
The U.S. Department of Justice’s Antitrust Division, the Federal Trade Commission (FTC), and the Department of Health and Human Services are collectively investigating these issues. They aim to understand how such investments alter market pricing, competition, and how referral patterns affect healthcare workers’ and patients’ access to quality and affordable care.
This inquiry is part of the Biden Administration’s broader initiative to reduce medical and prescription drug costs by enhancing competition within the healthcare sector. This initiative includes a recent FTC move to ban noncompete agreements, a measure that has met resistance from business groups. The federal government seeks public comments through June 5 and has established a dedicated website. The website emphasizes the significant role of healthcare providers and the public in shaping the outcome of this investigation.
Docs Vent As Feds Investigate Private Equity, Consolidation in Medicine (Weber, Medscape, 5/2).
