Key takeaways:

• The ACP and AMA have clarified their positions on private equity and corporate pushes into health care.
• The organizations call for greater transparency and guardrails to protect physicians and patients alike.

On the heels of a rise in private equity-owned practices, which can create unique challenges for physicians, major medical organizations have called for greater transparency and oversight.

ACP recently released a position paper on the “growing involvement” of private equity and corporatization in health care. That involvement “raises important questions about its effect on cost, quality, access and the physician workforce,” according to the position paper, because “private equity investment in health care is associated with increased costs and, in some settings, adverse effects on care delivery and outcomes.”

Now, “rising costs, administrative burdens, workforce shortages and declining reimbursement have made independent practice increasingly difficult, contributing to physician transitions to corporate ownership models,” which can create unique challenges “due to the evolving dynamics of their work environment,” according to the position paper, which calls for policy interventions to address those challenges.

At its annual House of Delegates meeting, the AMA also adopted policy strengthening its opposition to corporate pushes into medicine.

The “sweeping policy,” which “significantly revises previous” guidance established “some of the most specific AMA guidance to date intending to protect physician autonomy and patient care from corporate influence,” according to a press release.

More specifically, AMA’s new policy affirms the organization’s support for physician ownership; suggests that practices delivering health care “should be majority owned by actively practicing licensed physicians who retain final authority over clinical decision-making and operational decisions affecting patient care”; supports greater transparency for practice ownership; opposes clauses that “restrict physicians’ ability to exercise independent professional judgment, advocate for patients, report unsafe or unethical conditions, or continue caring for patients consistent with ethical and legal obligations”; identifies some contractual mechanisms that could “enable nonlicensed entities to exert” control over practices; and “opposes specific corporate ownership structures and contractual arrangements that could permit nonlicensed entities to exercise control over the practice of medicine.”

Healio spoke with Dejaih Johnson, JD, MPA, manager of regulatory affairs at ACP, to learn more about the organization’s position paper, pros and cons of private equity in health care, and more.

Healio: Why did ACP publish this position paper? Why is this subject so important for primary care physicians to know about?

Johnson: ACP published this position paper because private equity and broader trends of corporatization are increasingly shaping how care is delivered, how practices operate and how physicians can make decisions for their patients. More physicians are practicing in employed settings, and many practices face real financial pressures, including rising costs, administrative burden, inadequate reimbursement and burnout. These pressures can make outside investment attractive or, in some cases, feel necessary.

For primary care physicians, this is especially important because they are often the center of a patient’s care. Internal medicine physicians care for patients across the full continuum, including patients with complex, chronic and overlapping needs. When corporate ownership or management structures interfere with clinical judgment, shorten visits, emphasize productivity over patient need, or fragment the patient-physician relationship, that directly affects primary care.

The paper is really about making sure that as the health care system changes, patient-centered care, physician professionalism and clinical autonomy remain protected.

Healio: What are the pros and cons of private equity in the health care sector?

Johnson: Private equity investment is not inherently negative. In the right circumstances, outside capital can support innovation, infrastructure, care delivery transformation and service expansion. For some practices, investment may offer resources they would not otherwise have, particularly in an environment where independent practice has become increasingly difficult.

The concern is that private equity’s business model often depends on generating relatively short-term returns. In health care, that can create tension with the long-term goals of patient care, patient-physician relationships and community health. If financial goals begin to drive clinical operations, patients and physicians can be harmed. That may show up through increased costs, consolidation, reduced competition, pressure to increase volume, shorter visits, changes in staffing or constraints in physicians’ clinical decision-making.

So, ACP’s position is not that all private investment is bad. It is that health care needs stronger guardrails to ensure investment serves patients, supports physicians and does not prioritize profit over care.

Healio: How does private equity directly impact PCPs? What specific challenges do physicians who are employed by a health care organization owned by private equity encounter?

Johnson: Primary care physicians are often the front door to the health care system. They manage prevention, chronic disease, care coordination, behavioral health concerns and referrals. Anything that disrupts their ability to spend appropriate time with patients or exercise independent clinical judgment can have significant consequences.

For physicians employed by private equity-owned or corporate entities, some challenges may include increased productivity expectations, pressure to see more patients in less time, reduced control over staffing or scheduling, limitations on referrals, and less autonomy in clinical decision-making. These pressures can contribute to burnout and moral distress, especially when physicians feel they are being asked to practice in ways that do not align with their patients’ needs.

This is particularly concerning in primary care because the value of the patient-physician relationship is built over time. When care becomes more transactional, patients lose something meaningful, and physicians do too.

Healio: The position paper notes that “prior regulatory efforts have not fully prevented consolidation,” but there is now “stronger justification and clearer targets for enforcement and policy refinement.” Where did prior policy fall short, and what are ACP’s recommendations for how accountability, oversight and transparency can be strengthened?

Johnson: Prior policy has not always kept pace with how quickly ownership structures and financial arrangements in health care have changed. Many transactions may not receive sufficient scrutiny, and ownership structures can be difficult for patients, physicians, regulators and policymakers to understand. Existing oversight tools also may not fully capture the cumulative impact of consolidation, management services organizations, staffing changes, referral patterns, or ownership arrangements that affect clinical autonomy and patient care.

ACP recommends a more comprehensive approach. That includes greater transparency around ownership and financial relationships, stronger oversight of transactions and consolidation, and more attention to how these arrangements affect cost, quality, access, equity and the physician workforce. Policymakers should also strengthen enforcement against fraud, abuse, kickbacks, inappropriate self-referral, and other practices that may distort clinical decision-making.

Importantly, ACP also calls for greater oversight of entities that receive Medicare, Medicaid, and other federal health care dollars. If public funds are supporting care delivery, there should be clear accountability for how those dollars are used and whether patients, physicians and communities are being served.

Healio: What is the take-home message here?

Johnson: Ownership matters, incentives matter and transparency matters. Private equity and corporate investment can reshape care delivery in ways that patients and physicians may not immediately see, but that can deeply affect access, cost, quality and clinical decision-making.

ACP wants policymakers to ensure that patient care remains at the center of the health care system. That means physicians must be able to exercise clinical judgment, patients should know who owns and controls the organizations providing their care, and regulators should have the tools to identify and address harmful practices before they become entrenched.

This is not just a business issue. It is a patient care issue, a physician workforce issue and a health care accountability issue.

Healio: Is there anything else you would like to add?

Johnson: I would add that many physicians understand why these ownership changes are happening. Independent practice has become increasingly difficult, and physicians are facing tremendous financial and administrative pressures. So, the solution cannot simply be to criticize private equity or corporate investment without addressing the underlying conditions that make practices vulnerable to acquisition in the first place.

We need policies that support sustainable physician practice, reduce unnecessary administrative burden, improve payment adequacy and preserve meaningful clinical autonomy. Stronger oversight of private equity is important, but it should be part of a broader effort to make sure physicians can continue providing patient-centered care in a rapidly changing health care system.

For more information:

Dejaih Johnson, JD, MPA, can be reached at djohnson@acponline.org.