Physician Management Companies—Should We Care?

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