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Invited Commentary
February 28, 2022

Physician Management Companies—Should We Care?

Author Affiliations
  • 1Kaiser Permanente Bernard J. Tyson School of Medicine, Pasadena, California
JAMA Intern Med. 2022;182(4):404-406. doi:10.1001/jamainternmed.2022.0001

In this issue of JAMA Internal Medicine, La Forgia et al1 describe the prices paid for anesthesia services before and after health care facilities (hospital outpatient departments and ambulatory surgical centers) either contracted with or were owned by a physician management company (PMC), half of which had received private equity funding. Private equity firms typically invest in businesses for 3 to 7 years with the expectation of 20% to 30% returns.2 Not surprisingly, at facilities involved with PMCs, allowed charges increased by an average of 16.5%. The subset of facilities involved with private equity–backed PMCs saw allowed charges increase by 26.0%.1

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2 Comments for this article
Legal Bars to the Corporate Practice of Medicine
David Egilman, MD, MPH | Brown University

Several states bar the corporate practice of medicine. https://www.jdsupra.com/legalnews/structuring-clinical-practices-to-70699/#:~:text=The%20management%20company%20controlled%20the%20day-to-day%20operations%20of,of%20any%20of%20the%20practice%20profits%20or%20design.

Legal bars can be used to eliminate corporate control of medical practices.

Similar risks
Daniel Krell, M.D. | Retired PCP
Ownership of long term care facilities by private equity companies causes similar damage, with decreased quality of care. It's not just physician management companies. Physicians engaged with management companies have professional responsibilities; what will help protect long term care facilities?