On October 5, the Journal of the American Academy of Dermatology published an accepted manuscript in its “In Press” section by Dr. Sailesh Konda and Dr. Joseph Francis, both dermatologists at UFHealth, the medical arm of the University of Florida. In it, the authors discussed the rapid entrance of private equity firms into the specialty by buying and running practices around the country.
Eight days later, after an outcry from private equity executives and dermatologists associated with private equity firms, the editor of the publication removed the paper from the site. No reason was given.
According to the New York Times, Dr. Dirk Elston, the journal’s editor, stated that the article was temporarily removed “after receiving multiple calls and emails expressing concerns about the accuracy of a few parts of the article.” Nearly two weeks after removing the article, the Journal offered the authors to either correct the “factual errors” or retract the paper. The authors refuted the claim that the article contained any factual errors.
You can read the full story on the New York Times website.
The article raises a very important point. According to the New York Times article, the practices that the private equity firms acquired were the ones that were billing outliers, i.e. they were practices that were at the highest end of the spectrum for number of well-reimbursed procedures performed, and consequently, Medicare billing.
This obviously highlights the reason why private equity firms go into the healthcare industry – to make profit. One has to caution, however, that eventually, private equity firms would want a return on their investment, whether by maximizing profits, or eventually selling these practices to another entity.
Physicians need to be careful in losing control of their practices to Corporate America. By giving up control, physicians risk becoming just another cog in the wheel. This may happen despite the initial financial reward from the buy-out, and subsequent “stock option” arrangements may not work well for physicians beyond the first round. In addition, can physicians trust corporate America to safeguard patient care versus profit?