What happens when your doctor or vet’s office gets purchased by a private equity firm
On Saturday, I received a strange email. It said it was from Gastro Health and a new lab result had been entered into my patient portal from my Gastro Health provider. To access my lab results, I was to go to my patient portal.
I thought it was a scam. I haven’t had a test done recently related to my digestive system, and my doctor belongs to a practice called Gastroenterology Associates.
The next day, I thought I’d write an article warning people about a possible scam.
However, when I started doing research, I found that Gastro Health is a private equity firm that purchases the offices of gastroenterologists.
Gastroenterology Associates was the third doctor’s office that Gastro Health has purchased in Washington state. Gastro Health operates in seven states including Washington. The other states are Florida, Alabama, Virginia, Ohio, Maryland, and Massachusetts. The Gastro Health group has more than 390 physicians and 150 locations.
Health care providers selling their practices is part of a new trend that’s likely to continue. Struggling practices, with increased financial problems during the pandemic, are looking for financial options. When they sell their practices to hospitals, corporations, and private equity firms, doctors typically are paid between $1-2 million per physician, according to the Credentialing Resource Center. Then the buyers provide “market rate salaries” to the physician owners.
Private equity firms are investment partnerships that buy and manage companies before selling them. They invest in private practices using their capital and anticipate average annual returns of 20 percent or more, according to a study conducted at Weill Cornell Medicine.
The private equity firms then sell the practices after increasing their value by recruiting additional physicians, acquiring smaller practices, increasing revenues by taking steps such as bringing pathology services into a dermatology practice, and decreasing costs, such as using more physician assistants, the researchers said.
Although these companies say the new arrangements will bring better, more coordinated care for patients, some critics are concerned the consolidation will result in higher prices and practices being driven by earning more profits, instead of the best interests of the patients.
As for Gastro Health, I was disappointed when I learned it has a rating of “F” with the Better Business Bureau. The BBB ratings represent the BBB’s opinion of how the business is likely to interact with its customers.
For Gastro Health, the BBB website says it has received 35 complaints against the firm. Gastro Health has failed to respond to eight complaints filed against it.
I called the local Gastro Health office to ask about the email that was sent to me. I was told by the receptionist that my records from Gastroenterology Associates still exist but that Gastro Health is now operating the patient portal.
I left a message for the office manager to call me. My complaint is that the email wasn’t clear. It should have explained why the email was being sent – maybe because they want patients to move over to the new computer system? Gastroenterology Associates should have announced to its patients that it has been sold.
Unfortunately, there’s nothing patients can say or do about doctors selling their practice to a private equity firm. I’ll just have to wait and see if the quality of care offered by my gastroenterologist and the staff decreases due the sale of the practice.
MedVanta is a Maryland orthopedic management company whose physician-owners have rejected partnering with private equity.
“Private equity has no interest in reducing the cost of medicine,” Louis Levitt, M.D., chief medical officer of MedVanta, said in a KFF Health News article. “Their goal is to increase profitability in three to five years and sell to the next group that comes along. They can only do it by making the doctors work longer and reduce service delivery.”
Originally Published on https://boomersurvive-thriveguide.typepad.com/the_survive_and_thrive_bo/