How PE investment could affect independent physicians: 3 insights from Dr. Evan Goldfischer

Independent urologist Evan Goldfischer, MD, secretary of the Large Urology Group Practice Association, spoke to Becker's ASC Review about private equity investment in healthcare and what it could mean for independent physicians.

Note: Responses were lightly edited for style and clarity.

Question: What is the primary debate you've heard surrounding PE in healthcare?

Dr. Evan Goldfischer: A main point of contention surrounding PE in healthcare revolves around financial security versus autonomy. Proponents believe that the financial security acquired from PE deals can offer practices the resources needed to experience exponential growth, improve technology, expand their service offerings and streamline practice management. Furthermore, proponents believe that PE investments provide the professional expertise regarding capital, business and talent recruitment, [which is] necessary to run an efficient, high-quality practice.

Alternatively, critics of PE liken it to hospital consolidation, believing that a PE investment would strip practices of their autonomy and increase healthcare costs for patients if they are stipulated to utilize more expensive services and labs owned by PE firms. LUGPA is committed to delivering high-quality care to patients at affordable costs and believes that this goal can be achieved through a PE investment. However, there is a caveat: Practices should thoroughly evaluate their PE investment opportunities and determine if the scope and conditions of a presented deal would be beneficial to their specific practice.

Q: Do you think PE investments hurt or help independent physicians? How so?

EG: We need to view PE on a case-by-case basis. There are various factors, such as the nature of the investment deal or the culture of a practice, at play. This can determine whether a particular PE investment will prove to be a positive undertaking or an unfortunate blunder for a specific practice. Independent practices that fall prey to poor, unsustainable investment deals put their financial status, affordability and care quality at risk.

However, independent practices that take on a well-configured, sensible PE investment that is compatible with their practice can reap an array of benefits. Some of these benefits include accelerated growth, innovation that supports value-based care, ample financial support and the resources critical to running a top-notch practice with unmatchable care delivery for patients. Ultimately, whether a PE investment will hurt or help an independent practice depends on a multitude of considerations that must be accurately assessed and thoughtfully examined with the individual practice in mind.

Q: What's the most important thing for independent physicians/practices to consider before taking on a PE investor?

EG: Independent physicians interested in a PE investment must understand the degree to which their role and position within the practice will change. Under a PE deal, practice owners now transition to serving as employees and may receive reduced compensation as a fixed-salaried employee versus as a practice partner. Furthermore, practice owners will experience a shift from carrying a great deal of power in how their practice is run and managed, to playing a smaller role in the practice's decision-making process. Independent practice owners must fully comprehend how the PE deal will alter the day-to-day of the practice and its organizational structure. Then, with this informed insight, leaders of independent practices must determine if they are truthfully willing to exchange some control over their operations for the benefits that a solid PE deal could provide to their practice, care delivery and patients.

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