The PATIENT Act: Encouraging Transparency in Private Equity-Backed Physician Practices

For years, healthcare has been an industry shrouded in complexity and opacity, leaving patients and consumers perplexed and uninformed about the true cost of care. This lack of transparency pervades not only the insurance industry but also physician practices owned by hospitals, insurers, and the private equity or venture capital firms that operate them. Fortunately, a bill recently introduced in the U.S. Congress aims to change this: the Promoting Access to Treatments and Increasing Extremely Needed Transparency (PATIENT) Act. In this article Collaborative Imaging’s experts discuss the details of this legislation, its implications for private equity-backed physician practices, and why transparency is crucial for the healthcare industry.

Private equity firms have increasingly invested in healthcare, including acquiring physician practices and other healthcare facilities. While some argue that these investments benefit patients by improving the quality of care and enhancing efficiencies, others argue that private equity ownership creates conflicts of interest between the goals of investors and patients. In particular, critics contend that private equity firms use opaque business structures to avoid disclosing conflicts of interest or risks associated with their investments.

The PATIENT Act aims to address these concerns by requiring physician-owned practices with more than 25 doctors to report information about their business structure, mergers, and acquisitions to HHS on an annual basis. The bill would also apply to physician practices owned by hospitals, insurers, private equity, or venture capital firms, with provider groups facing fines of $2 million for failing to comply. By providing greater transparency, the bill helps ensure that private equity investors act in the best interests of patients and adhere to ethical principles.

However, the bill has faced opposition from the private equity industry, which argues that it could hamper investment in physician practices and healthcare. Critics argue that the PATIENT Act could deter investment by deterring private equity firms from acquiring these practices, reducing potential returns, and ultimately harming patients. However, supporters of the bill contend that it will create a more stable and sustainable healthcare system, as investors will have to consider the long-term well-being of patients rather than exclusively focusing on short-term profits.

Moreover, the PATIENT Act aligns with broader trends in the healthcare industry, which emphasize patient-centered care and pay-for-performance models. These trends require greater transparency and accountability on the part of healthcare providers, as well as a shift towards value-based care models that prioritize patient outcomes over profits. By promoting transparency, the PATIENT Act can help address longstanding inequities and inefficiencies in the healthcare system, ultimately improving outcomes for patients.

Transparency is crucial for a well-functioning healthcare system that prioritizes patients and ensures that everyone has access to affordable, high-quality care. The PATIENT Act represents an important step towards achieving this goal, by requiring private equity-backed physician practices to disclose financial information and other relevant details. While opponents of the bill argue that it could hamper investment and harm patients, supporters contend that it will encourage investors to focus on the long-term well-being of patients and create a more stable and sustainable healthcare system. As the bill moves forward in the legislative process, it will be important to monitor its impact on the healthcare industry and ensure that it promotes transparency and accountability while also fostering innovation and growth.