The Need For Sustainable Healthcare: Beyond Private Equity

In recent years, the landscape of emergency medicine has seen a marked increase in private equity (PE) investments in physician groups. This growing prevalence has elicited mixed reactions—while some applaud the financial revitalization it brings to under-resourced practices, there is increasing concern about the long-term implications for patient care. As the influence of private equity expands within this crucial sector, it becomes imperative to scrutinize how these financial engagements are reshaping the delivery of emergency medical services, impacting both the financial stability of healthcare providers and the quality and accessibility of patient care.

Private equity’s business model, with its focus on quick returns, often leads to cost-cutting measures that can significantly compromise the quality of patient care. This includes staff reductions and a shift towards high-revenue services, which can detract from the holistic care patients need, creating an environment where profitability overshadows patient needs. These financial pressures also often lead to higher patient costs and a decline in the morale and engagement of healthcare professionals, who may feel the strain of increased workloads and diminished autonomy. This is particularly alarming in private-equity-backed groups in emergency medicine, in-patient/hospitalist medicine, and anesthesia, where the potential harm to patients is most acute.

In emergency medicine, rapid, high-quality decision-making is critical, and any reduction in staffing or resources can delay treatment and negatively impact patient outcomes. Similarly, in in-patient or hospitalist medicine, where continuity of care and close monitoring are essential, cost-cutting measures can disrupt patient care plans and lead to preventable complications. Anesthesia, which involves managing patients’ pain and consciousness during surgical procedures, requires highly skilled professionals who must be able to perform their work without the pressure of increased workloads or reduced support.

Advocating for Patient-Centric Models

Given the risks of private equity’s presence in acute care medicine, it is crucial that healthcare leaders like you advocate for practices that uphold sustainable, high-quality care, focusing on models that enhance quality, decrease cost, and support systems independent of private equity influences. This shift will ensure that healthcare delivery remains focused on patient well-being and clinical outcomes rather than the financial priorities of external investors, thereby safeguarding the integrity and effectiveness of patient care.

Contrasting sharply with private equity, physician-owned models present a sustainable alternative that ensures financial viability without sacrificing the quality of care. These models benefit patients and providers by directing funds into care models rather than siphoning them to investors.  Physician-owned and led practices emphasize long-term patient outcomes over short-term financial gains and foster a culture where clinicians have a direct stake in the success of their practices. They ensure that clinical decisions prioritize patient care without the undue influence of profit-driven investors, and profits are often reinvested into the system to enhance facilities, support community health initiatives, and improve patient services rather than being distributed to investors.

Moreover, in an industry where provider burnout is a persistent and real threat to the quality of care, embracing physician-led models can also mitigate many of the challenges private equity poses to this epidemic. Physician-led practices not only yield high patient satisfaction rates but also foster an environment supporting the well-being of healthcare professionals by removing decisions from external forces and placing the provider in control of their practice.  Not only has this been demonstrated to mitigate burnout and promote retention, but it also creates an internally incentivized environment for continuous patient care improvement.

Fostering a Thriving Healthcare Ecosystem

The healthcare sector stands at a critical crossroads, presenting a unique opportunity to shape its future. By prioritizing patient care over profit, we can create a healthcare system that meets the immediate needs of our communities and ensures their future well-being. This approach goes beyond survival, fostering innovations and sustainable practices, leading to a thriving healthcare ecosystem. It empowers healthcare providers to focus on delivering high-quality care, improving patient outcomes, and supporting community health for generations.

About the Author

Theo Koury, MD, is President of Vituity, a physician-led and -owned multispecialty partnership with a nationwide footprint of more than 5,000 clinicians caring for over 9 million patients annually. Dr. Koury oversees the company’s financial and infrastructure strategies to support exceptional healthcare delivery that prioritizes patient satisfaction and outcomes while maximizing quality and efficiency.