New research, published in JAMA Internal Medicine, found that Physician Management Companies (PMC) appeared to negotiate significantly higher prices for anesthesia services.
PMCs, often backed by private equity (PE), are increasingly providing staffing and management services to health care facilities, yet little is known of their influence on prices. A study, published in JAMA Internal Medicine, sought to establish the association between outpatient facilities that contract with PMCs and prices paid to anesthesia practitioners.
Commercial claims data (2012-2017) from 3 large national insurers in the Health Care Cost Institute database were combined with a data set of PMC facility contracts to identify prices paid to anesthesia practitioners in hospital outpatient departments and ambulatory surgery centers.
The study of 2,255,933 privately insured patients who received anesthesia services in hospital outpatient departments and ambulatory surgery centers from 2012 to 2017 found that allowed amounts and unit prices increased by 16.5% and 18.7%, respectively, when facilities contracted with a PMC relative to non-PMC facilities. Larger increases were found if the PMC received private equity investment.
The study concluded that prices paid to anesthesia practitioners increased after hospital outpatient departments and ambulatory surgery centers contracted with a PMC and were substantially higher if the PMC received PE investment. This research provides insights into the role of corporate ownership in health care relevant to policy makers, payers, practitioners, and patients.
- Association of Physician Management Companies and Private Equity Investment With Commercial Health Care Prices Paid to Anesthesia Practitioners. JAMA Internal Medicine. February 28, 2011.