To add to those revealed in James Sherlock’s excellent posts about nursing homes and the health care industry generally, here is another culprit–private equity firms. They buy up medical practices in an area, creating great bargaining power with insurance companies, and begin raising prices. The fight is between giant, merged insurance companies and giant, merged medical practices. The losers are patients and the winners are the private investors.
Today’s Washington Post has a long article describing how this happened with anesthesia practices in the Denver area. The company, U.S. Anesthesia Partners, which calls itself a physician-owned company, was, in reality, created by the private equity firm, Welsh, Carson, Anderson & Stowe, which owns 55 percent of the stock.