Physicians taking back medicine: The rising toll of private equity in health care

A newly published study in the Annals of Internal Medicine has added more fuel to the growing alarm over private equity’s expanding role in American health care. Researchers found that hospitals acquired by private equity (PE) companies experience a decrease in staffing and salaries, as well as an increase in emergency department patient deaths and patient transfers to other hospitals.

This isn’t the first time such concerns have surfaced. Previous studies have shown that patients treated in private equity–owned hospitals suffer more hospital-related adverse events including bloodstream and surgical site infections and falls. A 2023 systematic review went further, concluding that private equity ownership was consistently associated with increases in costs for patients and payers with mixed to harmful impacts on quality, noting an association with reduced nurse staffing levels and a shift towards lower nursing skill mix. Researchers concluded: “No consistently beneficial impacts of PE ownership were identified.”

To explore how these findings play out in the trenches, Physicians Taking Back Medicine spoke with two doctors — anesthesiologist Marco Fernandez, M.D. and emergency physician Robert McNamara, M.D. — both of whom have witnessed firsthand the consequences of private equity in health care and are now leading efforts to reverse its influence.

“Our new partners are next door”

Fernandez is a full-time anesthesiologist and president of Midwest Anesthesia Partners, the largest independent group in Illinois. His first experience with private equity occurred when his group lost two hospital contracts to PE-backed staffing companies.

The hospital’s actions blindsided his group. “We showed up to a meeting with the CEO that we thought was about quality metrics. Instead, they said they were going in a different direction and told us — 'Our new partners are next door.’ There was no request for proposal. We couldn’t bid for our jobs; our contract was done.”

With their contract ending immediately and the new firm beginning the following month, Fernandez said that the hospital had to close down surgical operations for a month due to a lack of anesthesiology coverage. “There was an uproar in the community with several town hall meetings. Everyone was upset.”

That experience pushed Fernandez into advocacy. He first met with his state specialty society. “I explained what happened and they sympathized, but they said politically, there's not much we can do,” said Fernandez. State leaders encouraged him to reach out to his national society to share his experience. “At the next national conference, I stood at the microphone and told the executive panel what had happened. I got a standing ovation, and when I left, several people followed me out.” Fernandez began to connect with like-minded physicians, including emergency medicine doctors associated with the group Take Medicine Back. “They took me under their wing and taught me about private equity, because I really didn't understand what it was or how they operated,” said Fernandez. “They educated me and helped us build the Association for Independent Medicine and the Coalition for Patient-Centered Care.”

“Private equity’s goal is to profit”

McNamara is a longtime leader in emergency medicine and co-founder of Take Medicine Back. He explains private equity’s core model this way: “These are companies where investors look for opportunities to get back a 15 to 20% return on investment within a five-to-seven-year period.” The fundamental problem, he says, is the clash between profit and patient care. “They come into an industry, and they create practices to make money that can have negative effects. They can shut down hospitals. They do what they can to profit. Their goal is to profit when the goal for health care is to take care of the patient.”

Emergency medicine, he notes, was once rooted in altruism. “It started with a moral imperative to deliver care to the poor, the uninsured, to people arriving in emergency departments.” Over time, entrepreneurs began to identify the opportunity for profit, opening the door to corporate interests. “And now we have a situation where private equity is dominant,” says McNamara. “Many emergency departments you walk into are now owned by private equity.”

That dominance, McNamara warns, puts patients at risk. “The company determines who sees patients. Private equity says, ‘What’s the business decision here? Is it going to be a board-certified doctor or is it going to be a non-physician practitioner? How can I get away with the cheapest model?’”

The human cost

According to the Annals study, after hospitals were acquired by private equity, the number of full-time employees fell by an average of 11.6% and salaries in emergency departments and intensive care units declined by 18% and 16% respectively.

Fernandez describes how those cuts impact both professionals and patients. “They consolidate and then they try to figure out how to re-engineer the practice to maximize and extract profits. They raise prices and they cut expenses by decreasing nursing staff and replacing physicians with non-physicians.”

Fernandez experienced the devastating results of short-staffing nursing care. “My mom had inoperable liver cancer. The one thing we wanted was for her not to suffer, but she suffered horribly because of a lack of nursing staff.” For example, Fernandez said that when his mother was admitted to an inpatient hospice unit, she was given the wrong medication by a member of the nursing staff. “When we addressed it with the administration we were told that it was an agency nurse, someone who was just there to fill a shift and didn’t seem to really care about what they were doing. Later, I found out that the nurse’s staffing company was private equity owned.” For Fernandez, this tragedy crystalized the systemic danger: “Private equity cuts and cuts, and patients are the ones that are suffering.”

Indeed, even nursing homes and hospices are being taken over by private equity with negative patient outcomes. A 2021 study that found 11% higher mortality rates at nursing homes owned by private equity, possibly due to lower nursing staffs and declines in care standards. A 2025 examination of PE-owned hospices found that these companies extracted the highest amount of profit with the lowest amount of spending on patient care.

The corporate practice of medicine

Private equity’s influence often circumvents long-standing legal protections meant to preserve physician leadership in health care settings. While many states have laws against the “corporate practice of medicine” — non-physicians owning or controlling medical facilities — these rules are not always enforced.

“In most states, laws exist that say businesses can’t employ physicians. The same thing exists for lawyers. You don’t want the business interest between the patient and the doctor,” says McNamara, noting that enforcement is often lax. “They have scams to get around them,” such as hiring ‘friendly’ physicians to be the face of the company, while non-physician managers are the ones really making decisions.

McNamara and colleagues have been meeting with state legislators and attorneys general to address these loopholes, with meaningful results in several states. This year, Oregon enacted a law placing the nation’s strictest limits corporate interference in health care and Indiana expanded the attorney general’s powers to investigate corporate health care and enacted mandates on reporting PE ownership in health care.

The impact of Medicare underfunding

Private equity’s power is magnified by the chronic underpayment of certain medical specialties. Fernandez points out that anesthesiologists have faced decades of reimbursement inequities due to flaws in Medicare payment formulas calculated in the 1990s. “Commercial insurance payers generally pay physicians about 80% of Medicare’s payment rate, but anesthesiologists only receive about 30%,” he said. “We call it the ‘30% problem,’ and our national society has been trying to figure this out for thirty years, going to Congress year after year to try to fix it without success.”

With additional cuts to Medicare payments ongoing, anesthesia staffing companies must now rely on hospital subsidies to remain viable. “Over 90% of anesthesia groups in the country are getting some kind of hospital subsidy,” Fernandez says. “Private equity firms exploit these financial pressures by promising hospitals lower subsidy costs in exchange for contracts, but it’s always a bait and switch. It ends up costing the hospital more in the long run, because private equity’s fiduciary responsibility is to their shareholders, not to health care.”

Building resistance

Fernandez and McNamara believe reclaiming health care from corporate control will require a coordinated effort across organized medicine and grassroots networks. “We need to get all physician organizations to take back medicine,” says McNamara, noting that the American Academy of Emergency Medicine (AAEM) has been leading the way by filing lawsuits against private equity companies, defending physicians who are wrongfully terminated, and educating hospital administrators on the dangers of replacing physician-led groups with corporate interests.

While Fernandez agrees that organized medicine is essential, he believes that traditional institutions alone can’t fix the problem. “I can appreciate what the AMA and other groups are doing, but I think they’re dealing with the symptoms and not really addressing causes.” He believes that individual physicians need to step up and act. “We have more power than we think, and as physicians there is no better advocate or activist in terms of trying to change health care.”

For example, Fernandez recently participated in an anti-monopoly summit in Washington, D.C, advising important policymakers on the impact of private equity in health care. “We just want folks to invest in the future of medicine. Some of us are willing to go to Capitol Hill, and we’ll be on the front lines representing as many patients as we can. Others can help by being tuned in to what we are doing and spread the word, including on social media.”

A Call to Reclaim Medicine

A growing body of research confirms what many clinicians already feel: corporate consolidation and private equity ownership are eroding the doctor-patient relationship, worsening outcomes and endangering the integrity of care. But physicians like McNamara and Fernandez believe that we can — and must — take our profession back.

“If you care about your profession and you care about your patients, the solution is to get more involved,” says Fernandez, noting that advocacy is more than just activism — it can serve as a path to healing from burnout. “We can turn this around. It’s going to take some work, but showing up is the key.”

Rebekah Bernard, M.D., is a family physician in Fort Myers, FL, and the author of four books on health care topics. Marco Fernandez, M.D., invites physicians to attend the Association for Independent Medicine’s annual conference in Chicago on October 2-4, 2026. Learn more.

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Editor's note: Episode timestamps and transcript produced using AI tools.

0:00 – Intro
Announcer tees up new study showing ED mortality rises after private equity hospital acquisitions.

1:22 – Guest Intro: Dr. Marco Fernandez
Anesthesiologist; president, Midwest Anesthesia Partners and Association for Independent Medicine.

1:41 – Hospital Contracts Replaced by PE Firms
Fernandez explains two contracts lost to TeamHealth and NorthStar, no RFP, community backlash, OR shutdowns.

4:32 – Dr. Robert McNamara’s Background
Long-time critic of private equity’s role in emergency medicine; sets context from a 2021 interview.

5:00 – How Private Equity Operates
Investment return expectations, cost-cutting, staffing model changes, profit over patient care.

6:34 – Study Data: Mortality, Staffing Reductions
ED death rates, declines in FTEs, salary cuts in ED/ICU after PE acquisition.

7:21 – Personal Impact on Fernandez & His Family
Private equity staffing squeezes, inadequate nursing support, and his mother’s suffering.

10:32 – Wider Trend: Mortality in PE-Owned Facilities
Research also finds higher death rates in PE-owned nursing homes and hospice.

10:52 – “Penny Wise, Pound Foolish”
Fernandez on leadership short-termism, physician exodus, higher long-term costs, persistent understaffing.

11:57 – Working With Legislators & AGs
Corporate practice of medicine laws, tightening loopholes, educating state leaders.

13:03 – What Corporate Practice of Medicine Means
McNamara explains non-physician control, enforcement failures, and harmful workarounds.

14:23 – Grassroots & Organized Medicine
Joint advocacy efforts, silos among specialties, need for education and alignment.

15:47 – Reimbursement Reality for Anesthesiology
The “30% problem”: Medicare valuation error in the ’90s, lower unit pay, subsidy dependence.

17:26 – How the Miscalculation Happened
Time not accounted for in reimbursement; only anesthesia affected.

18:01 – Subsidies, Locums, Unsustainable Economics
Why most anesthesia groups now require hospital subsidies; Fernandez’s pivot to independent contracting model.

19:39 – Private Equity Pitch: “Efficiency” and Subsidy Cuts
Bait-and-switch promises to administrators; consolidation and extraction incentives.

21:29 – Golden Parachutes & Senior Partners
Deals driven by outgoing partners, quotas, short visit times, erosion of practice control.

22:28 – Strategies to Fight Back
Litigation, protecting physician groups from corporate replacement, expanding advocacy.

23:33 – Going Beyond AMA & Specialty Societies
Coalition-building with large independent orthopedic groups; focusing on state-level strategy.

25:40 – Physician-Led Advocacy & Taking Action
Host discussion on organized medicine vs. grassroots disruption and multi-front tactics.

26:41 – Advocacy as Antidote to Burnout
Meaning, connection, and purpose through engagement.

27:46 – Changing Mindset & “Showing Up”
Networking, persistence, attending meetings, building momentum.

29:08 – Closing Reflections & Call to Action
Partnership, unity, and showing up as vehicles to reclaim medicine.

29:11 – Outro
Host sign-off and thank you.