(The Center Square) – Plans to “dig deeply” into the impact of consolidation in the health care industry as smaller, independent medical practices are purchased by private equity firms and other large corporations is planned this summer in North Carolina, TCS has learned.
“Through the development of our Preferred Provider Program, we’ve heard from providers across North Carolina about the consequences of consolidation and the loss of independent practices in many communities,” Thomas Friedman, executive administrator of the North Carolina state health plan, told TCS. “Beginning in the summer we are going to dig deeply into our data and directly target the cost, both financial and health status, of consolidation in North Carolina as it relates to the State Health Plan.”
According to a federal study released last fall, “physician practices have increasingly been acquired by hospital systems, insurance companies, private equity firms, and other entities.” Rural health care is a campaign issue, particularly in the Coastal Plains.
In 2024, at least 47% of physicians had consolidated with hospitals, which was up from less than 30% in 2012, according to the study by the U.S. Government Accountability Office.
“Studies show this consolidation can increase spending and prices, with one finding significant increases for office visits occurring in hospitals,” the Accountability Office study found. “Care quality may be the same or lower. It’s unclear how this type of consolidation affects access to care.”
The consolidation trend comes just as North Carolina and other states are trying to find ways to control spiraling health care costs.
North Carolina has partnered with a private company, Lantern, to provide incentives to members of the state health plan to choose lower cost, but still high quality providers for their health care.
The incentive for members is a reduction in out of pocket costs such as deductibles and copays, and the savings can also help prevent future premium increases.
One study found that at the beginning of 2024, private equity owned 30% of all for-profit hospitals in the United States and thousands of medical practices.
“Private equity firms are not motivated by providing quality medical care to a community, but rather are squeezing their targets for profits,” wrote Andrew Schlafly, General Counsel of the Association of American Physicians & Surgeons, in an article published by the Missouri Medical Association. “Private equity is affecting almost every aspect of health care today, and causing substantial harm.”
