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Urologic practice consolidation by private equity firms


A recent study sought to investigate the trends in sudden and significant private equity acquisitions among urology practices between 2011 and 2021.

Michael S. Leapman, MD

Michael S. Leapman, MD

In the recent years, private equity firms have acquired many urology practices. Although this is common in other specialties, there is little known about these acquisitions in the field of urology.

A recent Urology Practice study,1 led by Michael S. Leapman, MD, sought to investigate the trends in sudden and significant private equity acquisitions among urology practices between 2011 and 2021. Leapman is an assistant professor of urology at the Yale School of Medicine, New Haven, Connecticut.

Could you discuss the background behind this study?

To set the stage, it's worth giving some context that there's been tremendous investment and consolidation in health care for decades and decades, and this is really a widespread and universal phenomenon. Merging companies and practices tout benefits of cost savings and increased care coordination. So, a trend has emerged in recent years where private equity firms, which is a form of private investment typically aimed at buying and restructuring companies, have begun to profoundly target health care practices. In general, the investment strategies involve acquiring a large number of these practices, instituting operational improvements, and ultimately selling these practices to another buyer, a strategic buyer.

There have been numerous examples of private equity acquisitions in other specialties, including dermatology, ophthalmology, and urgent care centers. But, in urology, private equity firms have recently begun acquiring urology practices and there's little known about the scale or pace of these investments. It's important to understand these questions for several reasons. For example, changes in ownership structure may impact patient outcomes, physician autonomy, and quality of life of physicians as well as health care expenditures that can affect society.

What were some of the notable findings? Were any of them surprising to you and your co-authors?

We undertook this study to characterize trends in urology practice acquisitions. We used data from a number of financial databases, the popular press, and Google searches, to characterize all urology practice acquisitions in the past 10 years. So, we identified 69 practice acquisitions by hospital systems, multi-specialty practices, urology practices, and private equity platforms. The change began to emerge in 2016, and since that point, the notable finding is that private equity has emerged as the dominant means of practice acquisition in urology. This is quite notable because it's really a deviation from what's happened in the past. It's not really surprising to us because this is mirroring trends in other specialties, but I think it's quite notable that there's been really a rapid change, which is beginning to affect the ownership particularly in certain regions. For example, in Maryland and New Jersey, as many as 25% of private practice urologists are now employed by private equity platforms.

What is the significance of the study findings for practicing urologists? For patients?

Urologists should be aware of the increasing trends of private-equity-backed acquisitions of practices. I assume that many practicing urologists are already aware of what's going on here. This is commonly spoken about, and I think there is widespread knowledge, but the scale and the pace of these changes have not yet been characterized. Many urologists may be personally interested or undergoing negotiations or discussions about the relative advantages and disadvantages of being acquired by a private equity platform. So, this at least begins the conversation of what the implications might be and what the specific considerations would be. The same follows for patients because in certain markets, the ownership is really beginning to be concentrated. This may lead to questions about what that means for patient care, for costs, for timeliness, and for quality of care.

What is the take-home message for the practicing urologist?

The take-home message is that there are recent dramatic changes in ownership structure and the pace of acquisitions by private equity into urology. We are interested in studying some of the downstream consequences, such as the impact on patient access, cost of care, and provider satisfaction. I would be careful to emphasize that we did not look at these in this study, and therefore, I cannot immediately tell through this if these are constructive changes or not. There is promise that by consolidating, those efficiencies can be introduced that improve the patient experience and patient outcome. So, really, there's a big need to look into these questions further.


1. Nie J, Demkowicz PC, Hsiang W, et al. Urology practice acquisitions by private equity firms from 2011-2021. Urol Pract. Published online October 5, 2021. doi:10.1097/UPJ.0000000000000269

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