Private equity in cardiology raises overuse concerns

By Noelle Serino | September 22, 2023

Private equity firms have taken the healthcare system by storm, buying out providers big and small, all the while driving the cost of care up and the quality of care down. 2022 was a big year for healthcare private equity acquisitions, with deals nearing $90 billion. As private equity’s infiltration into healthcare expands, what does this mean for the cost and quality of speciality care, such as cardiology?

To learn more about what experts in the field are saying about this issue, check out this recent STAT News article quoting Lown Institute president Dr. Vikas Saini.

Private equity takeovers

The past few years have seen rising private equity investment in healthcare, with 9% of all private and 30% of all proprietary for-profit hospitals owned by private equity firms. What does this mean for health system performance?.

“The interest of private equity in cardiology is not humanitarian. They see dollar signs and they’re going for them.”
Dr. Vikas Saini, president of the Lown Institute, in StatNews

A systematic review of 55 publications exploring the effects of private equity ownership on healthcare system performance gives us the bottom line up front: private equity ownership in healthcare means higher costs for both patients and payers and a range of mixed to harmful effects on quality of care. To better understand this phenomenon, let’s take a closer look at private equity’s newest fixation: cardiology.

Why cardiology?

Fields like dermatology, ophthalmology, gastroenterology, and others have attracted private equity firms’ attention because of the ability to conduct elective procedures in the outpatient setting. Medicare’s 2020 rule allowing for reimbursement for cardiac procedures in ambulatory surgery centers – along with the prevalence and severity of cardiac disease in the US – has made cardiology an attractive target for private equity firms. According to StatNews, at least 10 private equity firms are “racing” to buy up cardiology practices. They are tracking hot spots for cardiology acquisitions that have popped up in Florida, New Jersey, New Mexico, and other states.

The shift to outpatient and cardiac care overuse

The shift of cardiac procedures to outpatient settings combined with private equity investment may increase the risk of overuse, or unnecessary procedures.

CMS boosted reimbursement rates for stents performed in outpatient settings in 2008, based on a desire to increase procedural efficiency and cut costs. But they may have fueled the cardiac overuse crisis by creating a financial incentive for physicians to perform more and more procedures, regardless of whether they would benefit their patients. For example, ProPublica and the New York Times reported on doctors who conducted dozens of unnecessary vascular procedures, leading some patients to have their legs amputated.

Unnecessary coronary stenting may be next. Coronary stenting – also referred to as percutaneous coronary intervention (PCI) – involves the insertion of a small, mesh tube inside the coronary arteries to widen blood vessels that are narrowed or blocked by plaque.

While coronary stents can save lives when someone is having a heart attack, several studies have indicated that their utility is limited beyond that. Coronary stents do not benefit patients with stable heart disease, nor are they an effective tool for preventing cardiac events or reducing symptoms such as angina when compared to a placebo. Despite this evidence, top-performing hospitals continue to embrace and profit from this procedure, charging insurers up to $25,521 per PCI.

However, coronary stents are only a small piece of the financial prize that is cardiac overuse. A 2019 study revealed that non-invasive cardiologists produced $2.31 million and invasive cardiologists $3.48 million annually for the hospitals in which they were affiliated.

The financial promise of private equity ownership of cardiac care raises alarm bells for cardiologists such as Lown Institute President Dr. Saini. Private equity firms insist they will act in accordance with provider guidelines and stay out of providers’ operations, but who’s watching them? With the intersection of private equity and overuse looming large, we need the answer to this question.

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