Another scheme these PE groups have concocted is using their regional monopolies to force hospitals and surgery centers to pay an outrageous annual “stipend” for the “privilege” of letting them provide anesthesia. This is in addition to the traditional insurance billings mentioned in the article. However, I think (hope) we’ve reached peak PE intrusion in medicine with increased scrutiny like this article creates, coupled with laws passed to outlaw “surprise out of network billing” (a big tool they were using to boost their bottom line), and physician disillusionment as they realize they ended up working as a cog in the wheels of Walmart medicine. Medical practice is a weird market, revenues are pretty much fixed to Medicare with marginal flexibility in insurance contracts (you can’t just double what you charge), so the main way these firms extract value is through cost cutting (using their market power to pay physicians and mid level providers less, skimp on support staff, etc). Doctors, while typically not great business men, aren’t dumb and can tell when they are getting screwed. With upcoming ftc regulations to curtail noncompetes, a lot these docs can actually bail out, so hopefully private equity has had its day.
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