The effect of private equity in medicine

The landscape of health care has changed nearly beyond recognition in the past decade. If you’re a veteran of the profession, you’ve seen the other side of things — you once had the chance to live the dream, to swim in the pool of autonomy and self-employment, to call the shots and act on behalf of the patient without the constant supervision of bureaucracy. If you are new to the profession, maybe you missed the slow change in our profession that brought us to this point and don’t really know the difference. I began practicing somewhere in between these two categories and have experienced just enough of both environments to see that change — at least when it comes to health care — has not been for the better.

I’ve practiced in several settings now, and consistently, in every setting, I’ve watched the line between acting in the interest of patients versus acting in the interest of finances become increasingly blurred. The slow, gradual increase of private equity, hospital oversight, and government intervention has changed the criteria by which our success is measured.

But it’s not so gradual anymore. Humana (a for-profit insurance company) just announced their acquisition of Family Physicians Group, one of the largest providers to Medicare and Medicaid beneficiaries in central Florida.

This follows just weeks after Kindred Healthcare shareholders approved the sale of their company also to Humana and two private equity firms.

Not to single out Humana, in the past year we also have seen private equity firms Blackstone and KKR buy the two largest medical contract management groups: Team Health and Envision, who owns EmCare. It makes you wonder who is on the auction block next.

Physicians nationwide are becoming capital fodder as labor for the institutions who now control them. The ability to think and act independently and maintain control over our practices is being and will continue to be snuffed out as the monolithic companies profit billions of dollars from our work — while we assume the liability. Have we already become pawns in the game? As we continue to see these sweeping changes, as we lose our autonomy, as the bottom line becomes the primary focus, will we also lose our influence and voice? At what point does our professional opinion for the care of the patient become irrelevant?

We can no longer ignore the direction we are headed. If we inevitably are to lose our professional autonomy, then we must pursue financial autonomy. Take control. Make the rules. Don’t be a pawn.

Thomas Black is an emergency physician and managing partner, Napali Capital. He is the author of  The Passive Income Physician: Surviving a Career Crisis by Expanding Net Worth.

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