Financiers bought up anesthesia practices, then raised prices

[Celerity]

Private-equity firms are merging doctor groups to create firms that critics say are big enough to wield excessive power over prices

https://www.washingtonpost.com/business/2023/06/29/private-equity-medical-practices-raise-prices/

https://archive.fo/BkUeg



The multibillion-dollar private equity firm Welsh, Carson, Anderson & Stowe took less than a year to create, from scratch, Colorado’s biggest and most prominent anesthesiology practice. The financiers created a company, U.S. Anesthesia Partners, which in 2015 bought the largest anesthesiology group in the Denver region. Then it bought the next largest. Then it bought a few more. The company employed 330 anesthesiologists in Colorado at one point, according to its website, making it the state’s largest practice by far. It obtained contracts at 10 of the region’s 15 largest hospitals, according to the hospitals.

The Federal Trade Commission, which is supposed to prevent unfair business practices, questioned the company’s growth but did not stop it. The company raised prices for its services — one by nearly 30 percent in its first year in Colorado — and continued raising them for several years, according to interviews and confidential company documents obtained by The Washington Post. The price hikes boosted patient bills and pushed up insurance rates, former company physicians and managers said. Eventually, some of the company’s own doctors became disillusioned, physicians said, with about 1 in 3 leaving the company over a three-year period.

“The company became big enough to influence pricing and raised prices because it could,” said Matt Bigalk, who worked as director of operations at USAP’s Colorado branch from 2015 to 2017 and who previously handled negotiations with insurers for one of the merged firms. He now works at another Denver anesthesia practice. A spokesman for U.S. Anesthesia Partners denied that it wielded monopoly power. The company said the firm faces plenty of competition and pressure from insurance companies.

As the United States struggles to control medical costs, however, private-equity firms like Welsh Carson have become critical players in health-care economics, with private-equity funds acquiring hundreds of physician practices across America and, according to multiple academic studies, raising prices while returning billions to investors. A 2022 study published in JAMA Internal Medicine based on six years of data, for example, found that when anesthesia companies backed by private-equity investors took over at a hospital outpatient or surgery center, they raised prices by an average of 26 percent more than facilities served by independent anesthesia practices.

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[rampartc]

1. be very careful if you need surgery

if the anesthesiologist is NOT in your insurance network. their bill will shock you.

[Rebl2]

5. That happened to

me years ago and learned a lesson. Always ask if the anesthesiologist is in your insurance plan.

[Backseat Driver]

2. When investment houses help start-up payers evade

federal standards on health plan regulations because it's NOT insurance. It's called an "open access concierge health benefit plan."

First link below: This venture capital co helps start-up evade federal regulations. "Subscribers forced to provide SS# and complete medical history prior to effective date so company before effective date and forego enrollment timetables and "insurance standards" to acquire their histories. There is no credentialing or accreditation for providers. There is no state requirement to pay in 30 days or less. Subscribers go to anyone; vitori sends a physician "sign-up" form and supposedly accepts all who sign on. Subscribers have secret site from which to pick providers already on board - you will notice no mention of physician directory, a drug formulary, or plan total costs on plan site. Zero transparency to workers; 100% to employers. I know a worker whose doctor already said "Nope, nope, nope, not a chance I'll sign up for something like that."

Second link below: Start-up's site that recently received $30M from 1st site.

https://www.bvlp.com/portfolio/
Suspected employer "investor" who does not disclose actual cost of "premium" to employees, just employER. If it is, indeed, less than current insurance plans - It's my understanding that employer used to offer a list of multiple chosen-by-worker choices of "insurance company" plans /PPO/HMO/HSA

https://vitorihealth.com/
No reduction to payroll withholding for employer's shared "premium" but none "saved" returned to worker. No allowed choices of "insurance" plan payor and their lists of all payor network providers, formularies accepted - just convince your doc, even the telemedicine ones in both mental/physical and subscription authorizers to sign up!

[Wounded Bear]

3. All glory to our for profit health care industry...

[japple]

4. After I read this article in the WAPO, I started wondering if the same thing has been

happening in veterinary medicine. Turns out that it has. https://observer.com/2023/03/veterinary-practices-are-increasingly-corporately-owned-and-pets-owners-pay-the-price/

I know that prices have really jumped at my vet's offices in the past couple years.