In the old days, the doctor owned his own medical practice, but he was dependent on the confidence of his patients for success. He was motivated to please his patients because they could choose any doctor they wanted. In this regard, the patients owned their doctor. The hospital was motivated to provide equipment the doctor needed for his patients because he could choose to bring his patients to any of the area hospitals. The hospitals competed for the best doctors to bring their patients in for care.
Then came government intervention.
In the name of cutting the cost of medical care, the government passed laws that pushed the balance of medicine in favor of insurance companies and hospitals. For the first time, insurance companies began dictating treatment choices to the doctor and patient. Hospitals took control of physician’s medical practices and turned their attention away from the doctor and his patients. Consequently, the value of the doctor’s medical practice was eroded. In addition to losing the decision-making privileges, physicians were burdened with regulations and requirements from the government that reduced the time available to care for their patients.
Then came private equity (PE).
As doctors found the practice of medicine more complicated, frustrating, and less rewarding, businessmen (private equity) decided they could run the medical office more profitably than the doctor. They began to purchase medical practices with the intent of increasing the value (profits) in order to sell the practice later at a higher price to another group of businessmen. And so on, and so forth. The businessmen have no interest in medical care for the patient. Rather, they care about the profit derived from running the office.
So, who owns your doctor?
Is your doctor working for you, or is he working for a businessman? You need to know. And It is not always easy to tell. For example, when private equity buys physicians’ practices, they usually do not change the name of the office. And, initially, they may keep the same staff. But the message within the office is clear. The primary goal is efficiency and cost-cutting for the purpose of making greater profit. The steps to achieve this goal may include reducing the quality of the health care givers. It may include ordering more tests and procedures than what was done in the past. The emphasis is not typically to provide the highest quality of care for the patient.
What can a patient do?
Ask around about your doctor. Your doctor may or may not be at liberty to discuss this issue with you. However, other doctors outside the practice may know. It is essential to know if you “own” your doctor or if someone else does. This is a critical question as the doctor answers to the boss. And your health (and life) may depend on the answer. In the Tampa Bay area, I am aware of several ophthalmology offices that have been purchased by private equity.
For a telemedicine consultation with Dr Pautler, please send email request to spautler@rvaf.com. We accept Medicare and most insurances in Florida. Please include contact information (including phone number) in the email. We are unable to provide consultation for those living outside the state of Florida with the exception of limited one-time consultations with residents of the following states: Alabama, Arkansas, Connecticut, Georgia, Minnesota, and Washington.
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