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In a letter to Congress and the White House this week, health insurance group AHIP called for disclosure of what it called the “monopoly power” of private equity firms over air ambulances, emergencies and certain special services offered on a fee-for-service basis.
Citing growing evidence that these companies’ acquisitions of health care providers are undermining affordability and access, AHIP says these monopolies “have a predictable refusal to participate in networks to demand higher prices from health care providers.” effect, which leads to higher premiums for everyone.”
Private equity accounted for 45% of all healthcare M&A in 2018, AHIP said.it is at Institute for New Economic Thinking It claims that private equity firms borrow heavily from banks and other institutions, using the funds to acquire private entities in order to turn a profit in a relatively short period of time.
2019 Analysis medical economics It was found that initial private equity acquisitions targeted the most potentially lucrative specialties such as orthopedics, dermatology, urology and gastroenterology. But AHIP said the companies are now expanding their goals.
Raising prices has been a common tactic in the wake of private equity buyouts, and patient outcomes have suffered, the group said.
Its advice to state and federal lawmakers is to require public reporting of all private equity or hedge fund purchases of air or ground ambulance providers or facilities, emergency room physicians and other professional groups — especially where there is evidence of high concentration cases, or low network participation. Public reporting should include notification to existing patients and insurance providers with existing contracts, AHIP said.
As for federal regulators, AHIP recommends that the Department of Health and Human Services, as a condition of participation in Medicare, require hospitals in local markets to annually report any contracts with these private equity-backed providers, including the type of compensation structure and any incentives.
The group also said Congress should direct the Government Accountability Office and the Federal Trade Commission to conduct research on the anticompetitive effects of private equity and hedge fund acquisitions.
What’s the impact
Addressing the role of private equity firms in healthcare is one of several recommendations AHIP is making to Congress and the Biden administration. The organization also encourages lawmakers to support the expansion of consumer-focused in-home senior care through value-based care and payment models.
Additionally, AHIP is imploring lawmakers to pay site-independent fees up front to protect consumers from having to pay more for the same services, depending on the site of care.
Historically, Medicare has paid more for similar services provided in a hospital outpatient department than in a doctor’s office, the group said. This higher payment structure, along with the ability to influence referrals and access to 340B drug pricing, creates what the AHP calls “perverse incentives” to acquire physician practices and turn them into off-campus, provider-based hospital outpatient clinics department. Through this practice, providers have increased their rates with no discernible difference in care, the group said.
Other AHIP recommendations include: supporting patient options for telehealth; accelerating the availability of biosimilars for prescription drugs; and reforming the provider-owned drug system.
bigger trend
A working paper published in 2021 found that private equity firm ownership was associated with increased mortality and increased costs for post-acute patients, decreased five-star ratings, and slightly lower levels of direct nursing staffing, in addition to increasing registered nurse staffing.
A sort of A recent study During the COVID-19 pandemic, private equity-owned facilities performed similarly to other types of ownership in terms of COVID-19 cases and deaths, but private equity-owned nursing homes had less supply of personal protective equipment.
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