Study: Private equity pushes colonoscopy costs higher without improving care quality

Editor's Note

Private equity ownership drives up colonoscopy prices without delivering better patient outcomes, according to a large retrospective analysis. While independent and private equity-acquired gastroenterology practices show no significant difference in quality, prices at private equity practices rose sharply, especially in highly consolidated markets.

The study, published in JAMA Health Forum in June and reported by Healio on July 8, analyzed over 1.3 million colonoscopies performed between 2015 and 2021 across both independent and private equity-owned gastroenterology practices. Researchers found colonoscopy prices increased 4.5% more at private equity-acquired practices compared to independent counterparts. At sites where private equity firms held over 75% market share, prices jumped 6.7%, suggesting that limited competition enabled steeper price hikes.

Despite these rising costs, the article reports quality of care remained statistically similar between the two groups. Researchers examined six quality measures—including polypectomy detection, incomplete procedures, and adverse events—and found no improvement associated with private equity ownership.

The study included 590,900 patients from private equity-acquired practices and 527,380 from independent practices. Physicians at private equity-backed sites performed 12.1% more colonoscopies, spent 16% more, and saw 11.3% more patients for the procedure, all statistically significant increases. The outlet notes the study was limited to practices whose acquisitions were publicly disclosed.

Private equity acquisition of physician practices rose sixfold from 2012 to 2021. This recent analysis challenges the narrative that consolidation enhances care while highlighting affordability concerns. The article adds that hospital systems, too, are driving consolidation, with the number of solo radiation oncology practices falling 27% between 2015 and 2023. Many physicians feel overwhelmed by the administrative burden of running independent practices, experts noted, making offers from large entities more appealing—even if they come with tradeoffs.

The study raises questions about whether the coordination benefits of consolidation are worth the rising costs, and calls for further research into differences between acquisitions by private equity versus hospital systems.