Physician Selling Practice? Ethical Guidance Is Needed

By Stacey Kusterbeck

As healthcare in America continues to consolidate, private independent practices or solo practitioners are fewer in number. A growing number of physicians are selling their practices to private equity firms or other buyers, raising ethical concerns. “Clinical organizations are getting wrapped into even bigger organizations with bigger conglomerates. The business trajectory of medicine raises tons of ethical problems. I would like to see physicians play a bigger role in trying to minimize some of those ethical problems,” asserts Peter Ubel, MD, the Madge and Dennis T. McLawhorn University Professor of Business, Public Policy and Medicine at Duke University.

Physicians might be unaware of the leverage they have in pushing back on unethical practices, argues Ubel. Doctors potentially could negotiate a guarantee that the buyer will not raise prices above inflation for five years, for example. However, physicians are not always aware of the ethical implications involved in what they view as a financial transaction. Physicians may not realize that patients bear the brunt of future price hikes.

“A physician’s decision to sell a practice is not just a personal decision. There are moral consequences to the decisions people make about healthcare. And physicians, unlike businesspeople, take oaths to promote patient interests,” says Ubel. Private equity taking over physician practices often is followed by price increases.¹ An increasing number of Americans are enrolled in high out-of-pocket insurance plans, meaning a potentially sizeable portion of those price increases will be passed along to patients.² “It hurts their wallets. It often leads to non-adherence because people can’t afford things,” says Ubel.

Ubel wondered what information medical and professional societies were making available to their members to guide ethical decision-making on selling physician practices. After conducting a literature search, Ubel concluded that no such guidance was available.³ “I was disturbed that I couldn’t go to websites and find position papers that said, ‘Here are some of the things to think about when selling your practice,’” says Ubel.

The information that was available focused on how physicians could get the best deal financially when selling their practice. “There is a need to consider what business relationships mean for professional autonomy,” says Uber. This is of obvious relevance to physicians, who need to be concerned about whether working at a newly acquired practice will limit their autonomy. However, there also are ethical implications from the patient’s perspective. “If the patient becomes part of a practice that takes away a physician’s autonomy, that’s a problem for patients. And we need to think about that,” says Ubel.

If ownership influences how many tests or treatments physicians order, for example, that is interfering with the doctor-patient relationship and undermining the autonomy of both parties.

“Regulation is a last resort. But if we have moral constraints and the physicians, who are still very powerful, push back and negotiate for what’s best for patients, maybe we don’t need regulations,” says Ubel. Ideally this would not be done on an ad hoc, individual basis, but instead would become the norm based on guidance from professional societies.

As for hospital-based ethicists, they are focused, appropriately, on “bedside” issues, such as difficult end-of-life care, decision-making, or new genetic technologies. It is probably not realistic to expect ethicists to to have the bandwidth to advise physicians on ethical implications of selling practices, acknowledges Ubel. As for professional organizations, the main focus typically is on issues pertaining to clinical practice, such as doctor/patient interactions.

“While talking about promoting patient interests above all else, [organizations] might also be promoting the financial interests of their members. You don’t have a lot of ethicists there [who] are really digging into the business of healthcare,” says Ubel. Ideally, says Ubel, professional societies would take a leadership role on ethical decision-making for physicians selling their practices and convene a group to develop guidance. “Ethicists could then draw on that resource and use it to help their colleagues,” offers Ubel.

References

1. Borsa A, Bejarano G, Ellen M, Dov Bruch J. Evaluating trends in private equity ownership and impacts on health outcomes, costs, and quality: Systematic review. BMJ. 2023;382:e075244.
2. Garabedian LF, Zhang F, LeCates R, et al. Trends in high deductible health plan enrolment and spending among commercially insured members with and without chronic conditions: A Natural Experiment for Translation in Diabetes (NEXT-D2) study. BMJ Open. 2021;11(9):e044198.
3. Ubel PA. Private equity acquisition of physician practices — Looking for ethical guidance from professional societies. JAMA Health Forum. 2024;5(9):e242767.