Study author Jane Zhu, MD, talks to DermWire about the results.

There’s more physician turnover and greater reliance on physician assistants in dermatology practices that sold to private equity, a new study shows.

In the study of 213 private equity-acquired practices in dermatology, ophthalmology,  and gastroenterology and 995 physician-owned practices in those same specialties, private equity firms that acquire physician-owned medical practices experience greater turnover and rely more heavily on advanced practice providers — such as physician assistants (PA) and nurse practitioners (NP) —instead of physicians.

The results were published in Health Affairs.

The researchers found that physicians in private equity-acquired practices were more likely than their counterparts in physician-owned practices both to enter and leave a practice.

“There’s more clinician flux in private equity practices, and that private equity  acquisition itself is associated with increases in the numbers of advanced practice providers, compared to non-private equity, -acquired control practices,”  says senior author Jane Zhu, MD, assistant professor of medicine at the Oregon Health & Science University School of Medicine in Portland. 

“Private equity firms are likely targeting practices that are different from nonacquired practices, but they are also likely making specific changes that impact the workforce composition,”

This has important implications not only for clinician satisfaction and retention in the longer run but also potentially on quality and continuity of care, she tells DermWire.

At the individual level, the probability of exiting and entering is higher for clinicians at private equity–acquired practices, which may reflect turnover.

Such individual clinician-level movement suggests dissatisfaction with the workplace, which could be due to a host of factors, including workplace culture or burden, changes in expectations, financial incentives, etc, she says.

In the bigger picture,  physician counts didn't change after acquisition for private equity practices relative to non-acquired practices.  “[What] we observed was a relative increase in counts of advanced practice providers (NPs and PAs) associated with private equity acquisition, compared to controls,” she says. “This is not altogether surprising, because private equity’s focus on profit maximization may incentivize a shift towards lower-cost providers." 

This is in line with a trend in health care towards advanced practice providers to expand care access,  she says. “This in fact be a very good thing, though longer-term implications on quality of care and outcomes are still inconclusive.

Private equity is just one force in a changing health care ecosystem, one in which physicians are increasingly becoming salaried employees, she says.

“Private equity is a very valid source of private capital for many practices needing to keep up and compete with larger consolidated health systems, so if a practice is considering partnering with a private equity firm, there needs to be a lot of diligence regarding the type of partnership at hand, the financial incentives and their implications, and especially consideration of larger workforce effects,” she says.