Study: Private Equity Acquisitions Rise in Cardiology

July 3, 2024 — Private equity firms acquired 342 cardiology clinics over the past decade, with more than 94% of those acquisitions occurring between 2021 and 2023, according to a study published in JACQthe flagship journal of the American College of Cardiology, presented at AcademyHealth 2024 Annual Research Meeting in Baltimore. As this practice evolves, the study highlights the critical need to monitor the impact of private equity acquisitions on the quality of care and outcomes for cardiovascular patients, as well as the utilization of procedures.

Private equity in healthcare occurs when a medical practice and its service providers are acquired through a combined investment from multiple sources, including individual and institutional investors, pension funds, foundations, etc., with the goal of improving operations, financially supporting innovation and technology, increasing growth through add-on acquisitions, and ultimately increasing profitability.

“Policymakers and clinicians have expressed concern about the growing presence of private equity in other medical specialties. Although cardiology is an attractive target for private equity firms, little is known about the number and types of practices being acquired,” said senior author Rishi K. Wadhera, MD, MPP, MPhil, a cardiologist at Beth Israel Deaconess Medical Center and associate professor at Harvard Medical School in Boston. “Private equity acquisitions in other specialties have been shown to reduce quality and increase costs, so understanding the impact on cardiology is critical.”

The researchers found that between January 2013 and September 2023, private equity firms acquired 41 outpatient cardiology practices, representing 342 clinic locations. The number of clinic acquisitions per year increased from zero in 2013 to 215 in 2023, with 324 of those acquisitions occurring between 2021 and 2023, and 64 of those clinics were acquired more than once. The acquisitions occurred in 20 states, with the most in Florida, followed by Texas and Arizona. The study also found that acquisitions tended to be heavily concentrated in the same areas, with communities with the highest levels of poverty being less likely to be acquired compared with the wealthiest.

In an accompanying editorial, former ACC President Edward Fry, MD, MACC, said it is equally important to understand what motivates cardiologists to pursue acquisitions through these types of ventures.

“Is it all about money, or is the shift to private equity a symptom of more fundamental problems with the way medicine and cardiology are practiced today?” he said. “Clinicians, health system administrators, policymakers and society need to define the elements of clinical practice that are driving more cardiologists to seek alternative employment models. Addressing these will be essential to truly transforming care and promoting equity and value.”

For more information, visit: www.acc.org