In the past, medicine and business operated separately, with physicians focusing on ethics and community service while expecting fair compensation. Patients typically knew where to find care, and advertising was not a part of medical practice. Medical treatments were often supportive rather than curative.
Over time, advances in medicine have made it possible for procedures and clinical decisions to significantly impact patient outcomes, including life expectancy. This has increased demand for medical services as people seek ways to extend their lives.
Industries such as pharmaceutical companies, insurance providers, hospital systems, and related services recognized the financial opportunities in healthcare. They adapted by adopting managed care models and other strategies that changed how care is delivered and reimbursed.
In recent years, private equity involvement in healthcare has grown. According to observations from the Colorado Physician Health Program (CPHP), “Over the past ten years at the Colorado Physician Health Program (CPHP), we have heard a term more and more: ‘private equity.’ The heaviness with which the phrase is delivered is immediately noticeable.”
Business practices common in other sectors are now being applied to healthcare delivery. This shift has led to changes in ownership of medical practices, sometimes resulting in physicians losing control over key aspects of their work environment. As described by CPHP: “Literally overnight, a physician can go from being in charge of their clinic – medical decisions, staffing, patient flow, etc. – to no longer having control of any of that. Studies, lab work, and consultations are all scrutinized through the optics of the financial bottom line.”
The stress experienced by physicians appears linked to this loss of control following practice acquisitions by private equity firms. CPHP notes: “It has long been determined that the stress of any job is the ratio of responsibility to control… Through my experience at CPHP, it appears private equity can disrupt this balance in a way which the physician cannot compensate. We are seeing many previously level-headed physicians referred for disruptive behavior with ‘a change in practice ownership’ being one of the chief complaints.”
While no comprehensive solution is offered for these challenges, awareness is encouraged among those affected by changes in practice ownership. Physicians experiencing difficulties related to such transitions are advised that support is available through CPHP: “If you have recently gone through a similar transition or anticipate one, please recognize that CPHP is here to help you.”
