Physicians in private equity–exiting practices were 16.5 percentage points less likely to remain at their practices 2 years following the sale, with many shifting to larger physician groups, according to a recent study.
In the case-control study, published in JAMA Health Forum, investigators examined the association between private equity (PE) exits from physician practices and subsequent physician employment trends. Using data from the Centers for Medicare & Medicaid Services Doctors and Clinicians National Downloadable File from 2014 to 2020, the investigators analyzed 1,215 physicians, including 405 from 70 PE-exiting practices and 810 matched controls—who were selected based on specialty, hospital referral region, and practice size to account for factors influencing physician turnover. A difference-in-differences approach with a multinomial logit model was used to evaluate employment outcomes prior to and following PE exits.
Physician retention was the primary outcome, categorized as staying (billing through the same practice), working elsewhere (billing through another practice), or retirement (no longer billing). The investigators also assessed whether physicians who left their practices joined large groups with more than 120 physicians.
Results of the study indicated that physicians in PE-exiting practices were 16.5 percentage points less likely to remain at their original practices 2 years following exit compared with matched controls, representing a 27.5% lower retention rate compared with the 60% retention observed in control practices (95% confidence interval [CI] = 10.6–22.3). There was no statistically significant difference in retirement rates (0 percentage points; 95% CI = −4.1 to 4.0), but 16.5 percentage points of physicians from PE-exiting practices relocated to new employers. Among those who left, 10.1 percentage points were likelier to join large practices compared with control physicians (95% CI = 6.5–13.7).
Subgroup analysis showed that dermatology (29.9%) and family medicine (13.0%) had the highest turnover rates. Most PE-exiting practices had more than 20 physicians (65.2%) and were often located in the South (51.7%). Turnover was initially higher when practices were sold to non-PE buyers but later aligned with trends in PE-to-PE sales.
The investigators found increased physician turnover following PE exits, with a higher proportion of departing physicians joining large practices. Future research should examine the impact of PE exits on patient care and practice structures, including transitions to non-PE buyers.
Full disclosures can be found in the published study.