Is the private equity model harming radiology and other specialties?

As private equity’s interest in radiology and other specialties grows, stakeholders are left wondering whether this change is harming the profession or shaping it into something stronger.

MedPage Today sought to explore this question with a recent series. They used emergency medicine as the main focus, noting that PE-backed Envision Healthcare (which also operates in imaging) and TeamHealth account for 30% of the national outsourcing market for EM specialists. Other commonly outsourced specialties such as radiology and anesthesiology have experienced similar trends, the report noted. And overall private equity acquisitions in healthcare have  climbed from $42 billion in 2010 up to nearly $120 billion by 2019, one analysis found.

Phoenix-based radiologist Tarang Patel, DO, believes younger physicians are hesitant to join firms funded by private equity. In dermatology, they have even outright refused to work for corporate backers. MedPage also cited a 2020 Journal of the American College of Radiology survey, which found that 83% of early career physicians would prefer to work for an independent practice.

“The bottom line is there's going to be higher turnover on the retirement side and not enough new blood coming in,” Patel told the publication.

On the other side, supporters note that PE can potentially support and strengthen struggling healthcare businesses. They also offer large base-salary numbers and sign-on bonuses that are attractive to young doctors, though they sometimes come with drawbacks such as “aggressive” noncompete clauses, productivity pressures and increased risk. Read more from MedPage below.