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Geographic Trends Emerge For Private Equity Firms Acquiring Physician Offices

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The Northeast, Florida and Arizona are the nation’s hotspots for private equity (PE) firms to acquire physician practices across six specialties.

A new study examined geographic trends of private equity acquisitions of physician offices specializing in dermatology, gastroenterology, ophthalmology, obstetrics/gynecology (OB/GYN), orthopedics, and urology. Among those, less than 10% of physicians worked in PE-acquired practices, as of 2019, based on figures from the IQVIA OneKey database, compiled with the American Medical Association Physician Masterfile and other data.

Health care industry analysts have been examining effects, good and bad, of PE investments in physician practices. The study did not attach financial values to PE transactions and did not examine consequences for patient care, but it did refer to potential price hikes if market competition dries up.

“Because some PE acquisitions consolidate physician practices into larger organizations, geographic concentration of PE penetration may be associated with reduced physician competition, which could lead to increased prices,” the study said. “If PE acquisitions induce practice consolidation among remaining independent practices with financial pressures, this spillover effect may further hinder competition, underscoring the importance of monitoring practice consolidation and the ownership and regulatory environment of acquisitions.”

The research letter, “Geographic Variation in Private Equity Penetration Across Select Office-Based Physician Specialties in the U.S.,” was published earlier this year in JAMA Health Forum.

How Many And Where

The study found in 2019, there were 97,094 physicians in the six specialties and 4,738, or 4.9%, worked in PE-acquired practices, the study said. PE penetration was:

• 7.5% for dermatology, or 851 of 11,324 physicians
• 7.4% for gastroenterology, or 845 of 11,484 physicians
• 6.5% for urology, or 492 of 7,609 physicians
• 5.1% for ophthalmology, or 741 of 14,493 physicians
• 4.7% for OB/GYN, or 1,325 of 28,493 physicians
• 1.9% for orthopedics, or 460 of 23,891 physicians

Based on state and hospital referral region data, PE penetration was greatest in the Northeast at 6.8%, or 1,270 of 18,708 physicians, and lowest in the Midwest at 3.8%, or 638 of 16,613 physicians. PE penetration was highest in:

• Washington D.C., 18.2 %, or 188 of 1,031 physicians
• Arizona, 17.5%, or 326 of 1,866 physicians
• New Jersey, 13.6%, or 464 of 3,49 physicians
• Maryland, 13.1%, or 195 of 1,488 physicians
• Connecticut, 12.6%, or 212 of 1,688 physicians
• Florida, 10.8%, or 741 of 6,852 physicians

 

Source: Medical Economics

Plano Medical Office Building Attracts New Physician Groups With Planned Renovations

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Transwestern Real Estate Services announces US REO Fund, a Plano-based real estate investment firm, has selected Transwestern to provide leasing support for 7000 W. Plano Parkway, an 80,000-square-foot, two-story medical office building in Plano.

Formerly known as Plano Pediatric Medical Pavilion, the property will undergo landscape, lobby and common area renovations and rebrand as Prestonwood Medical Center targeting multiple medical specialties in addition to pediatrics. The building features an operational surgical center as well as gastroenterology practices on the first floor.

In addition to general pediatric specialties, the building formerly housed a sports medicine and orthopedic practice and a sleep apnea practice. Spaces ranging from 1,700 to 9,700 square feet are available across the entire second floor.

Built in 2005, Prestonwood Medical Center includes 6 per 1,000 parking and is directly across the street from Prestonwood Baptist Church and Hebron High School. With proximity to The Shops at Legacy, The Clubs of Prestonwood and large system medical campuses, the building offers physicians and patients nearby amenities that support daily operations.

According to Transwestern research, the Dallas-Fort Worth medical office market finished 2021 with positive momentum. Healthcare users continue to absorb space, bringing vacancy rates down to their lowest levels since 2018. As a result, rent growth has accelerated as tenants compete for a shrinking pool of available space. Triple net rents are up 4.1% from last year, nearly double the average growth rate.

 

Source: REjournals

Turner Construction Completes Denver’s Behavioral Health Solutions Center

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Turner Construction has successfully completed the new Behavioral Health Solutions Center on behalf of the City and County of Denver.

The architect for the project was Davis Partnership Architects. Turner provided preconstruction and construction services, including interior demolition and build out to support conversion from a family crisis center to a mental health support facility to be operated by the Mental Health Center of Denver (MHCD).

(PHOTO CREDIT: Brad Nicol Photograph)

The 28,741-square-foot facility is located at 2929 W. 10th Avenue in Denver and is designed to accommodate patients in crisis for brief inpatient stays on the first floor, transitioning to treatment of up to thirty days on the third floor. The program includes reception and common areas, laundry facilities, 46 bedrooms with exterior windows, nurse stations, restrooms and showers, private client meeting rooms, exam space, kitchen and dining space, gymnasium, and administrative support areas. The bottom floor of the facility features anti-ligature fixtures and other components typical for mental healthcare.

“We’re honored to complete another successful project on behalf of the City and County of Denver and provide a modern facility to accommodate people in crisis,” said Eric Erickson, project manager, Turner Construction. “Our team takes great pride in understanding the unique needs and nuances of every project we work on, and it results in buildings that fulfill the vision of our clients.”

 

Source: Mile High CRE