Mergers and acquisitions activity in the U.S. shows that private equity firms are increasingly buying up physician group practices across all specialties, with new research published in JAMA showing 59 such deals in 2013 increased to 136 in 2016, for a total of 355 across that time frame.

"The main factor driving this rise is that there's likely good returns on investment in this sector," Dr. Jane M. Zhu, assistant professor of medicine in the department of general internal medicine and geriatrics at Oregon Health and Science University, told HCB News. "There also has to be interest from the part of medical groups, who may see additional efficiencies from having an outside management party enter the picture. All indicators point to this trend continuing."

While still making up only a small proportion of group physician practices in the United States, private equity acquisitions are on the rise industry reports from 2017-2018 show, particularly in ophthalmology, dermatology, urology, orthopedics, and gastroenterology.

Out of approximately 18,000 unique group medical practices, the private equity acquisitions during that time frame included 1,426 sites and 5,714 physicians.

The team derived information from the Irving Levin Associates Health Care M&A data set, which includes manually collected and verified transactional information on a broad set of healthcare mergers and acquisitions, and compared it to that of the SK&A data set, a commercial data set of verified physician- and practice-level characteristics for U.S. office-based practices.

Matches between non-exact records of a practice name in the SK&A data set and reported acquisitions in the M&A data set were 87% in 2013; 82% in 2014; 90% in 2015; and 87% in 2016. The most common medical groups acquired were those specializing in anesthesiology (19.4%); multispecialty (19.4%); emergency medicine (12.1%); family practice (11.0%); and dermatology (9.9%). Within acquired practices, anesthesiologists represented 33.1% of all physicians; emergency medicine specialists, 15.8%; family practitioners, 9.0%; and dermatologists, 5.8%. An increase in the number of acquired cardiology, ophthalmology, radiology, and obstetrics/gynecology practices was also observed between 2015 and 2016.

Acquired practices had a mean of 4.0 sites, 16.3 physicians in each practice, and 6.2 physicians affiliated with each site. Of all medical practices, 81.4% reported accepting new patients, 83.4% accepted Medicare, and 60.3% accepted Medicaid. The majority of acquired practices were in the South.

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