The cost of anesthesiology rises after ASCs contract with corporate physician management companies, especially those backed by private equity, according to a study published Feb. 28 in JAMA Internal Medicine.
The study, undertaken by researchers at Weill Cornell Medicine and Columbia University Mailman School of Public Health, both in New York City, evaluated 7.2 million commercial insurance claims for anesthesia services for same-day procedures in more than 6,700 facilities.
The researchers found the prices health insurers and patients paid rose by 16.5 percent after ASCs and hospital outpatient departments contracted a physician management firm. That increase shot up to 26 percent when the firm was backed by private equity.
"Raising prices can hurt patients because if health insurers pay more, patients pay more in premiums and in co-pays," senior author Lawrence Casalino, MD, PhD, said in a Weill Cornell press release. "There's a very strong profit incentive for these corporations to make a lot of money quickly, particularly for private equity firms, which aim for 20 percent annual returns for investors. And the higher prices don't necessarily benefit physicians — the extent, if any, to which physician management companies share the revenue from increased prices with physicians is not known."
Dr. Casalino said despite concerns, the overall impact of physician management companies is unclear.
"Proponents claim that PMCs can bring management expertise, capital and probably a better ability to comply with regulations on quality and safety. The effect on the quality of care is not clear."