Tuesday , September 21 2021
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Private Equity invests in “Primary Care” Medicine

Summary:
I am adding a brief comment here (it fits and is on topic) rather than going back to the earlier post which I believe to be titled correctly; “Little Good can Come from Private Equity in the Healthcare Industry.” As my source of information I had identified two different articles taken from Modern Healthcare and also MedPage Today. Both I read religiously and from both I get email notifications. My three points to my titling are as follows: “Investors spent almost 10 times more buying physician practices in the second quarter of 2021 compared with the prior-year period.” It appears Private Equity woke up. A year later they are investing 10 times more that the previous year and are investing “more,” more in one particular part of healthcare . . .

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I am adding a brief comment here (it fits and is on topic) rather than going back to the earlier post which I believe to be titled correctly; “Little Good can Come from Private Equity in the Healthcare Industry.” As my source of information I had identified two different articles taken from Modern Healthcare and also MedPage Today. Both I read religiously and from both I get email notifications. My three points to my titling are as follows:

  • “Investors spent almost 10 times more buying physician practices in the second quarter of 2021 compared with the prior-year period.” It appears Private Equity woke up. A year later they are investing 10 times more that the previous year and are investing “more,” more in one particular part of healthcare . . . Primary Care. This is new and a greater investment.
  • Involvement in Primary-Care opens the door to supplying medical services through Medicare Advantage plans which are more open to pricing than traditional Medicare.” This is a newer foray into primary care which has been ignored by Insurance Companies and Private Equity firms as the money is in Specialties. It does open a door for PE to be more involved in healthcare.
  • Insurance companies are aggressive about building out primary care acquisitions to increase their patient influence on the front end, control costs in their own Medicare Advantage plans, and to minimize outside influence. It is all about locking in people to a company’s medical network in MA. For Private Equity investors, it’s more about having leverage in negotiations with insurers if they control some doctors in an area.

Granted PE firms have been involved in healthcare; but, they have largely ignored Primary Care. Granted It is a new endeavor. I am not a Private Equity person although my investment choices has given me a secure life going forward during my remaining years.

I am just a simple supply chain guy with a Masters in Advanced Finance, Capital Allocation, etc. who spent much of his career on factory floors fixing and maximizing throughput globally. I admit, there are those who know more than I on Private Equity. I do not believe I labeled the previous post incorrectly.

Now a story about one of those PE Firm’s increased interest in healthcare..

City + Ventures has been revealed as Neb.’s No. 1 Fastest-Growing, Privately-Held Company and is Ranked in the Nation’s Top 100 on Inc. 5000

OMAHA, Neb.–(BUSINESS WIRE)–Inc. Magazine revealed that Omaha-based real estate and private equity firm City+Ventures achieved the No. 71 spot on the annual Inc. 5000 list. The ranking propels eight-year-old City+Ventures from last year’s No. 207 place to the elite group of top 100 fastest-growing private companies in the nation.

City+Ventures owns and operates a wide array of businesses, including automotive dealerships in Los Angeles, San Diego, Dallas, and Pittsburgh; car washes; a private jet management and charter company; real estate management; and construction-related business, in addition to holding a real estate portfolio.

The one area of opportunity City+Ventures has not identified (from what I can find . . . and who knows?) is it “now” is venturing into healthcare.

“88 Tactical Group” is one of City+Ventures Nebraska companies. 88 Tactical Group, is expanding from an Omaha-based operation to 14 additional locations nationwide. 88 Tactical has a sister company which was initially into Covid testing, ran into issues, and spun the business off, and the new company is still a part of 88 Med (from what I can find) but re-stickered as GS Labs.

GS Labs was spun off as a clinic doing testing and in this case Covid testing. 88 Med was specializing in cosmetic procedures and hormone treatments. Nebraska company opens COVID rapid testing center – SiouxFalls.Business

There were issues with GS Labs and 88 Tactical Med Covid testing practices. Names were left off the tests as wll as

GS Labs is an out-of-network provider for BCBS Kansas City members, and charges about 10 times what Medicare reimburses clinicians for administering a COVID-19 antigen test, or $380, the suit said. The lab charges twice as much for administering more advanced PCR tests, or up to $979, according to the suit. Meanwhile, GS Labs accepted cash payments from consumers for a fraction of what it charged insurers.”

Other issues were found with GS Labs. Many of the tests were sent back missing information such as names and other information. GS Labs blamed it on subcontractors who claimed otherwise.

Blue Cross Blue Shield of Kansas City found GS Labs to be inflating prices and performing unnecessary test.

Healthcare insurance company Blue Cross and Blue Shield of Kansas City is suing a national COVID-19 testing facility which happens to be GS Labs. BCBS alleges GS Labs intentionally inflated its cash prices and performed unnecessary coronavirus tests in an attempt to fleece the not-for-profit insurer out of $9.2 million. BCBS Kansas City claims national COVID-19 testing lab is ‘disaster profiteering’ (modernhealthcare).

We are back again to the issue of whether commercial insurance such as insurance companies, Medicare Advantage, MediGap are the most efficient models in providing care or paying for healthcare.

So much for Private Equity and commercial insurance supplying good and equitable Healthcare.

Modern Healthcare: Physician practice deals see ‘staggering’ spending uptick in Q2

MedPage Today: “Private Equity Is Ruining American Healthcare”

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