The continuous rise of consolidation among ASCs — and healthcare as a whole — has leaders anxiously anticipating how the growing presence of large corporations and private equity firms will change healthcare.
Becker's connected with David Wild, MD, vice president and regional chief medical officer of Johnson City, Tenn.-based Ballad Health's southern region, to discuss the potential benefits — and risks — of consolidation in the industry at large.
Editor's note: Response has been lightly edited for length and clarity.
Question: Are you worried about corporate ownership and/or private equity interest in the healthcare industry? Why or why not?
Dr. David Wild: Large conglomerates entering the market for physician practices or ASCs has the potential to be a positive for patients. Having their provider more closely aligned with a payer or a large conglomerate that offers a lot of services has the potential for better coordination of care when your primary care physician is employed by the same large company that bears risk for your healthcare insurance costs. But I think in practice, what we see more often is that large, fairly bureaucratic organizations fail to deliver on that promise of better coordination and better care, just as size and scale becomes a factor that it might not have been when your care was more local.
There are examples of acquisitions where a fairly large physician group gets acquired by a Humana or a UniteHealth or a Walgreens or a Walmart, that end up benefiting both the group and the acquirer. It's not that insurance companies, corporations and private equity are all negative in these conversations.
From the physician perspective, after acquisitions occur, autonomy becomes more limited, and the implications of the goals of these large entities, limiting costs and making a profit, begin to trickle down and impact the relationship between a patient and their physician.
I think the primary risk of large-group acquisitions is that they may have a driver that is not necessarily aligned with delivering quality patient care itself, but is more aligned with business-minded factors.
When you take that back to that broad question of whether corporations and private equity in healthcare concern you, I think the answer has to be 'yes. There's concern, because it's sometimes hard to see where the mission or the vision overlap — where the goals of the physicians and the practice align with the goals of the entity.
If you're a private equity firm, and your goal is to take this practice and reduce costs and to increase revenue, then to turn around and sell it for a profit in three, five or seven years, it's hard to identify where that is aligned with the goal of a physician, which is to have relationships with patients that are meaningful and improve their health.
No matter how you look at it, it's concerning. While there are a number of variables to consider, these purchases are definitely changing the healthcare landscape, and it will be interesting to see how it all plays out.