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Each week, Health Affairs' Rob Lott brings you in-depth conversations with leading researchers and influencers shaping the big ideas in health policy and the health care industry.
A Health Podyssey goes beyond the pages of the health policy journal Health Affairs to tell stories behind the research and share policy implications. Learn how academics and economists frame their research questions and journey to the intersection of health, health care, and policy. Health policy nerds rejoice! This podcast is for you.
Hello, and welcome to a health podocy. I'm your host, Rob Lott. Today, we have a very special episode of the podocy. That's because we're recording with a live audience. This conversation is still fully virtual, but this time instead of just me and a guest on Zoom with our producer Jeff, now as we record, it's March 12.
Speaker 1:We've got a whole crowd of listeners. And in a few minutes, we're going to put them to work by asking them to weigh in with their own questions. And I especially want to thank our guest, Doctor. Yasha Sweeney Singh, a healthcare economist and assistant professor of health services policy and practice at Brown University. She's the lead author of a paper in the brand new March 2025 issue of Health Affairs.
Speaker 1:The article's title is also its main finding, quote, physician turnover increase in private equity acquired physician practices. It's the latest among quite a few that Health Affairs has published on the topic of private equity over the last few years. But Doctor. Singh and her co authors are nevertheless with this paper, Pushing the Boundaries of Our Knowledge of Private Equity. This is one of the very first papers in health affairs, or anywhere really, to provide a solid base of evidence about the explicit and direct impact of private equity on the physician workforce.
Speaker 1:Alright, so without further ado, let's dig in. Doctor. Yashaswini Singh, welcome to Health Odyssey.
Speaker 2:Thank you so much for having me. I'm so excited to talk about this paper. And I thank the audience and listeners who have joined us to talk about the study. And I look forward to our conversation. Thanks again so much for having me.
Speaker 1:Of course, awesome. Thanks for being here. Why don't we just dive right in? I thought we could start with a little bit of background. As I've mentioned, we've published quite a few pieces on private equity and health care.
Speaker 1:Just a few weeks ago, we hosted Doctor. Zeri Song on this podcast, where he pointed to recent estimates of private equity in healthcare. More than four fifty hospitals have been acquired by private equity, over 6,000 physician practices, potentially with upwards of 10% of physicians in private equity owned practices. Is that consistent with your own understanding of the changing footprint of private equity in health care? And what do you see as some of the factors driving that growth?
Speaker 2:Yeah, that's a great question to kick us off. I must start by saying it's really difficult to precisely estimate how many deals or how many investments have been happening in health care that have been backed by PE firms. A large reasoning behind this is the lack of systematic reporting or disclosure requirements. So just with that caveat, the numbers shared by Doctor. Song are certainly consistent with trends that we've been seeing as well.
Speaker 2:Over the last decade or so, PE firms have invested 1,000,000,000,000 in the American health care system and investments have ranged every setting of care from cradle to grave, as one co author pointed out. So this includes neonatal services, fertility services, primary care, hospitals and emergency rooms, as Doctor. Sun pointed out, but also other areas like nursing homes, assisted living facilities, hospice, and home health. So there isn't any segment within health care that has been unaffected by these trends. Now when we think about factors that have led to the evolution and growth of PE in health care, it's a little harder to answer that question because there are a complex interplay of factors here that are relevant.
Speaker 2:So first, we have an aging society and an aging population. As people get older, they demand more health care services. And for PE firms that signal sustained demand in an industry where returns are almost guaranteed because you have a demand in place that's expected to grow. Second, I would say, and I'm sure a lot of us on this call would agree, The US Healthcare system is often characterized by a lot of attributes that make it really frustrating as consumers to interact with the system. It's characterized by a lot of waste and redundancies, a lot of inefficiencies, high administrative costs, and high administrative burden.
Speaker 2:And so some might say or proponents of these trends might say that PE firms are drawn to healthcare as a way to offer a solution to some of the attributes that can be so frustrating for consumers. Firms tend to focus on driving efficiencies and if there's one area where those improvements are desirable, it's certainly within the healthcare system. The other thing I have to mention is historically interest rates have been low. So operating in a historically low interest rate environment means that PE firms have been able to access debt at relatively cheaper rates. So that's fueled their expansion.
Speaker 2:But overall, I think the takeaway is that PE firms have embarked on this rapid remarkable pace of consolidation and investment in healthcare in The US spanning every segment. And there are a variety of demand and supply push and pull factors at play here.
Speaker 1:Got it. Well, with such rapid change comes, I think, some opportunities to study what's behind it. A lot of prior research has looked at some of the effects of private equity acquisition on provider practices. And I'm wondering if you can give us a quick sense of what the literature over the last few years has shown. Is there a growing consensus about the effects of private equity acquisition on things like costs, utilization, even outcomes?
Speaker 2:Absolutely. So the literature, the academic literature is fairly consistent in showing that when PE firms acquire a hospital or a physician practice, the cost of care goes up. Prices go up, prices paid by commercial insurers go up, and that has implications for the cost of care for patients directly. On the utilization side, the evidence is also emerging and largely consistent. And there we see that PE firms drive higher utilization of services that can be profitable, ancillary services like imaging, diagnostic imaging services or lab tests are often services that we've seen go up following acquisitions.
Speaker 2:And then at the same time, we've seen that PE firms can pare down or cut back on services that they might deem as less profitable even if they might be critical for patients. And so the utilization piece is certainly interesting. What's less clear is what all of this means for patient well-being. Patient outcomes are harder to study, at least using secondary medical claims data, which a lot of researchers use. The patient experience is often missing in these secondary data sets.
Speaker 2:And while research from the nursing home space and the hospital space has shown that patient outcomes can worsen following acquisitions of this type, the evidence is less conclusive when we look at physician practice investments. So this is an area that I know a lot of researchers and policymakers are paying attention to, but evidence at present is still lacking.
Speaker 1:My understanding is that less is known about the effect on physician turnover in private equity acquired practices, at least before this paper. Why is that a potentially useful measure of the impact of private equity?
Speaker 2:Sure. So turnover is a really critical but unexplored dimension of this trend, right? At the center of all of these trends is a physician or a physician practice that makes the decision to sell their practice to investors. A large body of literature in health economics and health policy and health services research has shown that physician stability or workforce stability can be really good for patients. Patients value it when they can see one doctor consistently over time.
Speaker 2:If they're able to see one doctor consistently over time, patients have fewer hospitalizations, better health outcomes, better satisfaction overall with the health care system. So on the flip side, turnover is associated with disruptions in care continuity, disruptions in patient health, patient access as well. And so this is a really critical space to examine. I also want to share a story, if I may, of how it's important to study from an academic lens, I wanted to share a personal story of why it's important to me to I was invited to speak on a panel last year on similar topics, the growth of private equity, the growth of corporate actors in healthcare and what this means for care delivery. And one of my co panelists on this panel was a doctor who was formerly employed at a PE acquired practice.
Speaker 2:But for a variety of reasons, and we can get into those later, decided that that employment condition or arrangement wasn't the right one for him and ended up leaving the practice. So this was a former PE doctor who was my co panelist. And in conversations with him, I realized that when you have PE firms invest in practices, there are a lot of changes to the practice of medicine that materialize when you have financial investors sort of shaping the practice of medicine. Not only can that result in physician turnover, as was the case of my co panelists, but in many cases this can lead to physicians leaving the community as well. So the doctor I was on a panel with ended up moving state lines in search of his subsequent employment And that fact made me realize that not only is this an example of doctors quitting PE practices but in many cases they might be quitting medicine entirely or leaving entire regions in search of alternate employment.
Speaker 2:So it's pretty important trend for us to monitor. There's been renewed attention on looking at the workforce implication of consolidation more broadly. And I think PE investors, PE investments with their potential to cause this type of workforce disruption is a particularly important time for us to be having this conversation.
Speaker 1:Okay, great. So I'm imagining you walking away from this panel and saying, well, this
Speaker 2:is a really important question, a good topic to study. What did you find? So our study had two key takeaways. First, we found that following acquisition, the number of clinicians at PE acquired practices increased by almost forty six percent. Now this is a striking number and it highlights PE's growing footprint across The United States health care system.
Speaker 2:It's also reflective of private equity's growth strategy in physician practices. PE firms often use something that is referred to as a platform and add on model of growth where they initially might start out with a platform acquisition, a large physician practice that enjoys perhaps good brand recognition, a loyal stream of patients. And then the incentive is to gradually increase market share by rolling up smaller physician practices under the same parent entity or the same platform entity. So we see the increase in the number of clinicians by 46% as being reflective of this pattern of aggressive growth and consolidation that we've known to be so unique to PE firms. The second finding, which is also the title of our paper, was that private equity acquisitions increased physician turnover at acquired practices.
Speaker 2:Now the baseline turnover before any acquisition, before any investment was hovering around 5% at these practices. And after acquisition, this increased to over 20%. Now in percentage terms, that's an increase of over 260%. And interestingly, we found turnover persisted to three years after acquisition. So this wasn't just a case of senior physicians who sell their practices and then make the decision to enter retirement.
Speaker 2:To the contrary, we found that a lot of the physicians who were exiting practices making up this group of physician turnover, a lot of those physicians were 60. So around seventy percent of physicians were 60. The average age of the exiting physician was around 50 years. And so this told us that really this is a trend that's affecting mid career doctors and practices who perhaps have disagreements with the changes that might come about after acquisitions. Changes in the culture of medicine, the culture of the practice, or the performance oriented nature of practice patterns that are shaped by investors.
Speaker 2:Something about the PE model was making these doctors leave and it was leading to a fifth of the practice, twenty percent of the doctors leaving in each year after acquisition.
Speaker 1:Wow, those are some pretty notable numbers. A lot to dig into there. In a moment, I want to ask you a little more about those findings, as well as, maybe the policy implications of those findings. But first, let's take a quick break. And we're back.
Speaker 1:You're listening to our conversation with Doctor. Yasha Sweeney Singh about the impact of private equity on physician turnover. Doctor. Singh, how do non compete clauses fit into this puzzle? What does your data imply about the role of non compete clause?
Speaker 2:That's such a great question. I'm so glad you asked that. So I want to start by acknowledging that a lot of employment contracts that are put in place after acquisitions of this nature often have non disclosure agreements and non compete agreements. So the former makes it really hard to understand the latter. Again, just to maybe set the stage a little bit for our listeners, non compete agreements are agreements to not compete.
Speaker 2:They are very common in employment contracts. What they do essentially is restrict the ability of a physician to either work for or get employed by or start their own new practice within a certain geography, within a certain time period. So non compete clauses are fairly common within the healthcare industry. They're used pretty pervasively regardless of ownership type or investment type. But they've caught the attention of federal antitrust authorities in recent years because there is reason to believe that expansive use of non competes can restrict worker mobility.
Speaker 2:It can make it harder for doctors to leave undesirable employment conditions. It can make it harder for them to set up shop in the nearby location. And in some cases, if a doctor is interested in leaving a PE practice, for example, it can make it really difficult to find subsequent employment within the same region. So non competes are a really big deal because they can influence where physicians go. In our study, we were able to identify how far doctors travel in search of subsequent employment once they leave a PE practice.
Speaker 2:And we found that regardless of whether a doctor was leaving a PE practice or a non PE practice, doctors often need to travel great distances in search of alternate employment. For doctors leaving PE practices in particular, they often needed to move about 100 miles on average. And I must say I presented this work to a group of doctors, a board of directors of a physician professional association last week. And when I mentioned this number, a 100 mile move in search of subsequent employment, there was an audible gasp in the room because it's so difficult to understand the parameters of non compete agreements because they're often paired with non disclosure agreements. So I'm glad that the renewed focus on PE has brought this kind of spotlight on the use of non competes in healthcare because in many cases, we're seeing not only our doctors switching jobs, but they might be leaving entire regions entirely.
Speaker 1:That 100 mile radius, is your sense that your co panelist who moved to another state, is that part of what was behind his decision to shift locations?
Speaker 2:There can be many factors that shape where physicians go in search of alternate employment arrangements, the presence and parameters of non compete agreements is certainly one factor and we'll never know for sure. But the other perhaps more important factor that we should be aware of is, again, the platform and add on consolidation model really means that for some physicians and some specialties, there might not be a lot of non PE employment opportunities available in certain regions. If a PE firm has already consolidated a local market and we have examples of some states and some specialties having 80% PE penetration, 70% PE penetration. That means for a doctor who wants to leave a PE practice, they might not have any option but to perhaps move across the country, move across state lines, or quit practicing medicine entirely. And unfortunately, I've had some very disturbing conversations with folks who've had to make those difficult choices as well.
Speaker 1:Okay, well, let's turn to our first listener question. I have a raised hand from Lori Andress.
Speaker 3:Great. Thank you. I'm in public health. And so my familiarity with this topic is only from teaching healthcare finance one hundred one, plus I'm in public health again. But I'd like to, if possible, hear some comments about how this impacts the average community or consumer and then a discussion about regulations and policies that are in place to deal with this if there are any.
Speaker 3:Thank you.
Speaker 2:Absolutely, thank you so much for that great question. From the patient perspective or the community perspective, one thing that we haven't talked about yet, but that's very relevant to consider is that non competes can often make it difficult for physicians to inform their patients when they're leaving a practice or take their patients with them if they're quitting a practice to join a competing practice. For the patient, this means that your doctor might one day just stop practicing at a location that you might have a history with, and nobody will be able to tell you why that is the case. In addition to that, nobody will be able to tell you where the doctor went. And so it makes it really hard to establish continuity in the patient physician relationship, which again makes it really hard to establish trust between the physician patient relationship, which is such an essential component of care delivery and patient outcomes.
Speaker 1:Okay, next question we have in the Q and A is from Cheryl Danberg. She asks, do you know whether some of the departures are from older physicians who view this as an opportunity to get a large payout and leave practice?
Speaker 2:Thank you so much for that question, Cheryl. So that is certainly part of the picture here. For other listeners who might be less familiar, oftentimes when you have a physician partner who makes the decision to sell their practice, they're often rewarded a large financial payout as their ownership stake in the practice that they sell to investors. And this kind of payout can encourage early retirement decisions or make them slowly wind down their operations practice. So it certainly is one aspect of driving physician turnover.
Speaker 2:We didn't examine this question directly but we did look at the age composition of physicians who are exiting practices. And we found that the majority of physicians who are quitting PE acquired practices tend to be younger mid career professionals, so around 50 years old on average. And so this to me, even though we didn't directly examine the physicians who might be retiring, this finding to me suggests that it's more than just the group of physicians entering retirement and seems to be a trend that's more focused on mid career doctors who might not see a path to ownership or partnership within the practice anymore after these changes.
Speaker 1:Our next question is a raised hand from Ijeoma Nodimapara.
Speaker 4:Well, hi. My name is Doctor. Ijeoma Nodimapara. I'm a physician, scientist, and community advocate, and I thank you very much for this topic. My question is around patient outcomes.
Speaker 4:Have we noticed any impacts of this change or this trend on patient outcomes and other healthcare or public health metrics?
Speaker 2:Thank you for that question. I think center to all of this is what happens to the patient. So it's a very important question. Unfortunately, because of the secrecy that often accompanies a lot of these transactions, There hasn't been any direct research that examines what the changes in workforce turnover or composition after acquisition mean for patient outcomes. So that direct link hasn't been established.
Speaker 2:But there's a growing body of work that shows patient outcomes don't appear to improve after PE firms get involved in care delivery. We've seen this to be true in the hospital setting, the nursing home setting, and so on. And at the same time with this study and another recent study published last week, we know that there are changes to the workforce. So they're independent facts at this point. But again, putting this in the context of the broader literature, we know that an important aspect of physician turnover is diminished care continuity.
Speaker 2:And we know that care continuity from a variety of settings is so essential for patient health and patient well-being. When patients see the same doctor, they have fewer hospitalizations, fewer emergency admissions, better care experience. And so there's reason to believe that the flip side, when physicians are made to see fragmented providers or are not able to establish trust with their providers, there's reason to believe that that would affect patient outcomes in undesirable ways.
Speaker 1:We have another question in the Q and A focused on reimbursement denials. This questioner is sort of pointing to perhaps an increase in denied reimbursement or perhaps lower rates. And the question of whether or not that changes the attractiveness of a health practice to a potential private equity acquisition, or are payers also being acquired by private equity? I guess the underlying question is about sort of the incentives or potential attractiveness of PE acquisition related to payment rates and spending?
Speaker 2:Yeah, thank you for that question. I'll do my best to answer it. But if I don't get to all of the points raised, please feel free to rephrase or re ask. So any PE investments of insurers but I have seen joint ventures or partnerships of PE acquired physician practices and primary care in particular with health insurers. So these joint ventures mainly target senior focused primary care practices that are maybe more incentivized by Medicare Advantage payment incentives.
Speaker 2:We could have a whole separate conversation on that topic. So that's all I'll say about that for now. And then on the topic of payment denials or PE somehow figuring out different payment incentives that exist when it comes to interactions with insurers, there's been consistent evidence now that private equity acquisitions with their emphasis on platform and add on roll up consolidation increases the bargaining leverage that practices have to negotiate higher, more favorable reimbursement rates from commercial insurers. So we know the cost of care goes up about 10% to 26% depending on the clinical area you look at. And at the same time, we know that in certain areas like emergency medicine, for example, where PE firms might be deploying an out of network billing strategy.
Speaker 2:We've seen from the No Surprises Act public data that a lot of the disputes being filed to get higher sort of out of network rates have been also led by PE backed entities. So I must emphasize, and I love to say this, if you've seen one PE acquisition, you've seen one PE acquisition. And I mean that to say the strategy to deliver profitability and high returns is very context specific. And so we know that overall the cost of care goes up but the mechanism to drive higher cost of care can differ across settings. It might look like out of network billing and denials in one setting but it might look like higher negotiated prices in another.
Speaker 1:Great. We have another question in the Q and A from Suhun Kwok that asked how PE acquisition of physician practices has evolved since the early 2010s. And now I know we covered the sort of general increase in the volume of PE acquisition, but I'm wondering if you can say a little more about perhaps how those techniques or focus areas have changed.
Speaker 2:Absolutely. So PE investments in physician practices was a trend that began to materialize around 2014, '20 '15. The early investments were in procedural specialties such as dermatology, gastroenterology, ophthalmology, so on, where really the emphasis for revenue generation was tied to fee for service payment incentives and on increasing the provision of a lot of procedures. As I mentioned, an aging population makes these settings very attractive to investors. A lot of people as they age will need skin biopsies and colonoscopies and cataract surgery.
Speaker 2:So it's no surprise that these were some of the specialties that caught PE's attention in that twenty fourteen, twenty fifteen timeframe. Now, if we look more recently sort of around the period and the onset of the COVID-nineteen pandemic, investors have focused instead on value based areas of care like primary care, cardiology and oncology where there might be a little different focus on maybe looking at comprehensive care or holistic care for the patient across the care continuum rather than providing or delivering procedures. And so in primary care, for example, we've seen acquisitions grow starting 2019, '20 '20. And this is still an area where investments and exits continue to materialize, so will be important to monitor going forward.
Speaker 1:We've got another question in the Q and A from Greg Block. Greg, good to see you here. He asked if we've seen any evidence of collective physician action via medical specialty societies or other means to basically saying no, no, to signing a non compete agreement?
Speaker 2:So that's a good question. And I want to be a little cautious in maybe highlighting how little we know about these trends and investments that might not warrant a blanket no. So folks might disagree with me on this, but I think a starting point before we can decide whether this is something to say yes or no to is to just be aware of these trends. And in my conversations with policymakers and regulators and professional societies, it's not clear to me that these important stakeholders have the necessary data and information they would need to even understand whether this is something that there needs to be better regulation or checks and balances around. So we can get into talking about policy levers and policy remedies here.
Speaker 2:But as a spoiler, the first and foremost principle here is to ask for greater ownership transparency because you can't solve a problem you can't see. You can't solve a problem if you can't agree on the magnitude of the problem. And an essential component to doing so is having better data on ownership structures of physician practices and other entities that are receiving corporate investments, including from PE firms.
Speaker 1:Great. Well, that's maybe a good segue to return to one of the original questions as well as some other concepts we've kind of hinted at. What are our policy options to address some of these changes? What have we seen implemented so far, if anything at all?
Speaker 2:Ravi, now I could have an entire separate conversation on this I spend a lot of my time thinking about that question. So I'm happy to share some of my thoughts around this with you. A lot of our conversation around private equity investments in physician practices has been centered around the platform and add on consolidation strategy. So if I've convinced you that consolidation is the key concern here, then the policy remedies lie in greater antitrust enforcement. Now, this was something that the federal antitrust authorities paid closer attention to, the Federal Trade Commission and Department of Justice.
Speaker 2:And in the last few years, we've seen a greater appetite to bring lawsuits against PE firms and PE backed entities that embark on this pattern of consolidation. So that's promising. It's certainly a step in the right direction. Now, at the same time, what's been new and interesting and important for us to monitor going forward is how states are also going to be leading the charge in generating greater market oversight to understand if there are transactions that are altering the competitiveness of healthcare markets. We've seen many states introduce legislation, take greater action, put greater enforcement authority in the office of the attorney general, for example, to hold PE firms more accountable.
Speaker 2:So as a first policy lever, I see antitrust enforcement or antitrust scrutiny as something that can help catch acquisitions that are particularly likely to result in higher consolidation or higher prices or restricted access. And that's a role that historically was played by federal agencies but now we're seeing states do more of. Now if the concern is around physician autonomy and clinical judgment and physician mobility and concerns around well-being of the workforce, then antitrust tools might not be enough to remedy those concerns. So if that is a concern, then we've seen states reconsider their corporate practice of medicine doctrines to kind of bring them into 2025 to reflect the current realities of healthcare markets. We've also seen different states take up bills to ban non competes or make them less restrictive or less enforceable in the context of healthcare workers.
Speaker 2:So that also is a promising direction. And then finally, and I alluded to this earlier, underpinning all of this is a desire for greater ownership transparency. Many times state policymakers and federal policymakers are convinced that this is an area that warrants greater attention. But they're unsure how much of this is a problem that's affecting their local constituencies or their local markets. And so having better data on ownership structures, on ownership changes, and incentives that can shape the way medicine is practiced, I think all of this will go a great way into helping researchers and policymakers and physicians understand who is the ultimate owner who then influences the way medicine is being practiced.
Speaker 1:What a great overview of kind of the policy landscape there. One question we have in the Q and A from my colleague Michael Gerber asks about the results of your study and more generally, what is unique to PE acquisition versus, say, more traditional consolidation and acquisition and mergers overall?
Speaker 2:So you'll have to stay tuned for my next paper for that.
Speaker 1:All right.
Speaker 2:No, but I'm kidding. I can give you an answer. But also, this is an important question. So we're taking a closer look at it systematically. But I can tell you PE in many ways has not invented the playbook of consolidation.
Speaker 2:We've seen for the last decade or so the dominant trend in consolidation of physician practices has been the acquisitions of physician practices by hospitals and health systems. More recently, we've seen other players like health insurers and retail companies and healthcare conglomerates get involved in buying up physician practices. And so the question raises a good point, right? Like how much of what we're talking about is unique to private equity and should we be disproportionately concerned about these trends if they're backed by PE firms? That's a great question.
Speaker 2:The answer we're still waiting for and it's an empirical question so that's the good news. But I can tell you there are specific attributes of PE that perhaps warrant a closer look. So the first is these are investors that are acquiring the majority stake investment in entities with the desire to exit. And so exit incentives seem very specific to PE firms where if you have a hospital that's buying up a physician practice, they might not be looking to sell the practice within a three year horizon. But for PE firm involvement, it is essential for firms to exit in order to generate their own expected payoffs.
Speaker 2:And some of my earlier work in Hildecker Scholar actually has shown that PE firms when they invest in physician practices, they tend to exit within a three year horizon and exit takes the form of sale to other PE firms. So that kind of restarts the cycle of buying to sell and might be one sort of amplifying factor in care continuity and care disruptions that follow consolidation. The other factor that's unique to PE is the use of borrowed money. A lot of these investments are made by using large amounts of debt, often 60% to 90% of the deal value is made up of debt or borrowed money. And the debt is placed on the balance sheet of the acquired entity, not the firm itself.
Speaker 2:And so this can create financial pressures for the practice to not only service debt payments but have this huge burden that's placed on their balance sheet which can then change or reprioritize what kind of services they offer, what kind of patient populations they seek and so on. So my thinking is a lot of the things we've talked about as being specific to PE might be concerns that apply more broadly to different types of entities that are spurring consolidation. But at the same time, are some unique features that warrant closer attention.
Speaker 1:Great. Well, you have your work cut out for you with future research topics. That's really promising. We're going to turn to a question from Robert Schreiber, who asks whether there are geographic regions where this is happening in particular. And are there acquisitions happening where managed care and value based care is less prevalent?
Speaker 2:The regions that are most affected by these trends seem to be states in the Southeast, but also in the Northeast. Northeast. So we've seen Texas, Arizona, and Florida standing out as regions that have attracted a disproportionate number of acquisitions relative to the rest of the country. And then certain pockets of the Northeast also emerge as lucrative targets. There's some variation across specialties, but I would say in general terms, are the regions that have been very attractive.
Speaker 2:And the second part of the question was investments outside of value based care.
Speaker 1:Yeah, I think the question was, is the prevalence of value based or managed care practices, does that sort of affect the likelihood of private equity coming in?
Speaker 2:Yes, I'm so glad you raised that point. So that's certainly consistent with what I've heard in my conversations with doctors who are more open to entering into these partnerships with investors. The reality is that the practice of medicine has become increasingly complicated. And with the proliferation of value based contracting in place, a lot of times practices need size and capital to expand and to compete for these types of contracts. They need capital to invest in technology infrastructure to maintain their ability to compete for these contracts.
Speaker 2:And so there hasn't been any systematic research that documents the link between these two. But anecdotally, I've heard from several leaders in the field that the growth of value based care has been incentivizing this larger trend towards practising in bigger groups, but also this newer trend of venture capital firms and private equity firms emerging as a way to provide capital in order to compete for these contracts, which is increasingly a reality of certainly in primary care, where in the last few years, we've seen a lot of investments.
Speaker 1:Great. A question here from Patrick Burke. A little bit of a tangent from the question of turnover, but I think relevant. Patrick asks, is there evidence of higher prices, meaning that they're selecting private payers rather than government payers? Are they pulling practices out of Medicare and or Medicaid contracts, which would then potentially worsen the gap between patients with commercial versus government paid care.
Speaker 2:That's a really good question. I think changes in payer mix that might serve to improve the profitability or bottom line of these practices, that's a very real concern. I'm not aware of any research to date that has examined those questions in part because it's really difficult to come across an all payer claims database that would allow you to examine changes across different types of payers. So it's a great one. It's a great question to get to the bottom of, but unfortunately, we don't have a lot of research on this point to date.
Speaker 1:Great. Well, Doctor. Singh, we've, I think, answered all the really wonderful questions from our listeners here today. This has been such a wonderful experience.
Speaker 2:Absolutely. Thank you so much for this conversation. And I really thank everybody who's been sharing such great questions and giving me ideas for future work. It's been so wonderful to share this study with you all. So I just wanted to say that.
Speaker 1:Wonderful. Well, so much to look forward to. I want to thank our live recording listeners for joining us here today and offering such great questions. And a huge thanks to Doctor. Yashasuni Singh for being our first live guest on Health Odyssey, and encourage everyone to check out her paper in the March 2025 issue available online now.
Speaker 1:So folks who enjoyed this episode, please recommend it, share it with a friend, and tune in next week.
Speaker 2:Thank you so much, Rob. Thank you so much, everybody.
Speaker 1:Thank you. Thanks for listening. If you enjoyed today's episode, I hope you'll tell a friend about a health policy.