Equity Investment in Physician Practices: What's All This Brouhaha?

There have been two waves of equity-based investment in physician practices. Both used a combination of public and private sources, but in different mixes. The first investment wave in the 1990s was led by public equity and physician practice management companies (PPMCs), with less involvement by private equity (PE). The second investment wave followed the Affordable Care Act (ACA 2010) and led by PE firms. It has generated concerns of wasteful spending, less cost-effective care, and initiatives harmful to patient welfare. This paper compares the two waves and asks if they are parallel in important ways. We describe the similarity in the players, driving forces, acquisition dynamics, spurs to consolidation, types of equity involved, models to organize physicians, and levels of market penetration achieved. The paper then tackles three unresolved issues. Does PE investment differ from other investment vehicles in concerning ways? Does PE possess capabilities that other investment vehicles lack and confer competitive advantage? Does physician practice investment offer opportunities for super-normal profits? The paper then discusses ongoing trends that may disrupt PE and curtail its practice investment. We conclude past may be prologue: what happened during the 1990s may well repeat, suggesting the PE threat is overblown.

THE RESUSCITATION OF THE CENTRAL NERVOUS SYSTEM OF MAMMALS

The cerebral circulation was interrupted for periods of three to eighty-one minutes by ligation of the innominate and left subclavian arteries proximal to the origin of the vertebral, in ninety-three cats. Eleven dogs were used in the earlier experiments. The eye reflexes disappear very quickly and a period of high blood pressure follows the occlusion immediately; vagus inhibition causes cardiac slowing and a fall in blood pressure, followed by a second rise after the vagus center succumbs to anaemia. Respiration stops temporarily (twenty to sixty seconds) after the beginning of occlusion, and then follows a series of strong gasps of the Cheyne-Stokes type, after which it stops until some time after the restoration of the cerebral circulation. The respiratory and vagus centers lose their power of functioning at approximately the same time. Asphyxial slowing of the heart may occur without the agency of the vagus center. The blood pressure slowly falls to a level which is maintained throughout the remainder of the period of occlusion. The anterior part of the cord and the encephalon lose all function; no reflexes are obtainable. The reflexes of the posterior part of the cord persist; the intravenous injection of strychnine does not affect the anterior part of the cord during the period of occlusion; but does affect the posterior portion of the cord. There is no secretion of tears or saliva, and the intra-ocular pressure is reduced. The blood pressure falls still more after release of the cerebra arteries, but soon begins to rise. The respiration returns suddenly, two to sixty minutes after restoration of the cerebral circulation, the first gasp being a strong one. The rate gradually increases until rapid enough for natural respiration. The eye reflexes and intra-ocular tension return more gradually, ten minutes to three hours after restoration of the cerebral circulation. The anterior part of the cord recovers its functions gradually. The first reflexes occur only on the same side as the stimulus, crossing of reflexes, to involve the other side, not occurring till later. As a rule, all reflexes return, and a short period of quiet follows. The anterior part of the cord again becomes irritable to strychnine, but succumbs to its action before the normal part. Spasms, of tonic, clonic, or mixed type, then appear, terminating in (a) death, (b) partial or (c) complete recovery. In partial recovery, disturbances of locomotion, such as walking in a circle, paralysis, dementia, loss of sight, hearing, and general intelligence, characterize the post-convulsive period. After complete recovery, there is a return to normal deportment. No gross lesions of the nervous system, other than a congested appearance of the previously anæmic area, were observed. Transection of the spinal cord stops the spasms below the level of section. Hemisection of the cord stops the spasms on the same side, below the level of section. Death, without any return of the reflexes after release of the cerebral arteries, has followed an occlusion of seven and one-half minutes. Respiration has returned after an occlusion of one hour. Five animals have recovered completely after an occlusion of seven minutes or more. Only one animal has recovered completely after an occlusion of fifteen minutes. No animal has recovered completely after an occlusion of twenty minutes. In Herzen's ²⁶ resuscitation of an animal after several hours of cerebral anæmia, there must have been some anastomotic channels to the brain. Mayer's ²⁷ limit of ten to fifteen minutes of cerebral anæmia, beyond which resuscitation is not practicable, is close to the correct one. It appears to us that, in cases of resuscitation two hours after cessation of the heart-beat, (Prus., loc.cit.) the auricles must have kept up a slow but, in some degree, an efficient movement of the blood through the brain. The truth of this suggestion might be tested by introducing some easily recognized, non-diffusible substance into a vein after the heart-beat ceases to affect a manometer, and later searching for it in the brain and other parts of the body. But, whatever the reason, cerebral anaemia in these cases must have been less complete than in our experiments. The histological alterations of the cord and brain are now being studied. The results will be published later.

Malar fat pad elevation: An aid to closure

BACKGROUND

In closure of defects inferior to the eye, it is important to avoid inducing lower lid ectropion.

OBJECTIVE

To describe a new technique for closure of defects inferior and lateral to the eye.

METHODS

A case of malar fat pad elevation to close a post-Mohs surgical defect is described and the procedure is detailed.

RESULTS

This technique enabled good wound closure with minimal tension and avoided the complication of ectropion. A transient asymmetry was manifest postoperatively.

CONCLUSION

Malar fat pad elevation is an effective and elegant means of closing defects inferior and lateral to the eye. This technique minimizes extensive tissue undermining and movement with its consequences of postoperative tissue swelling, bruising, and hematoma formation. The side effect of ectropion is prevented.

Prospective, single-blind, randomized, controlled study to assess the efficacy of the 585-nm flashlamp-pumped pulsed-dye laser and silicone gel sheeting in hypertrophic scar treatment

OBJECTIVE

To determine the efficacy of the 585-nm flashlamp-pumped pulsed-dye laser and silicone gel sheeting in the treatment of hypertrophic scars in lighter- and darker-skinned patients.

DESIGN

Prospective, single-blind, randomized, internally controlled, comparison investigation.

SETTING

Large academic dermatology department.

PATIENTS

Twenty patients with hypertrophic scars (19 completed the laser treatments and 18 completed the silicone gel sheeting treatments).

MAIN OUTCOME MEASURES

Clinical measurements included hypertrophic scar blood flow, elasticity, and volume. Patients' subjective complaints of pruritus, pain, and burning were also monitored. Histological assessment of fibrosis, number of telangiectasias, and number of mast cells was performed. Statistically significant improvements in clinical measurements and patients' subjective complaints determined treatment success.

RESULTS

Mean scar duration was 32 months (range, 4 months to 20 years). There was an overall reduction in blood flow, volume, and pruritus over time (P = .001, .02, and .005, respectively). However, no differences were detected among treatment and control groups. There was no reduction in pain or burning (0-40 weeks), elasticity (8-40 weeks), or fibrosis (0-40 weeks, n = 5 biopsies) in the treated or control sections of the scars. Unlike in a previous study, the number of mast cells in the scars was similar to the number of mast cells in healthy skin.

CONCLUSION

Clinical results demonstrate that the improvements in scar sections treated with silicone gel sheeting and pulsed-dye laser were no different than in control sections.

Electrosurgical skin resurfacing: a new bipolar instrument

BACKGROUND

Numerous modalities may be used for skin resurfacing, including chemical peels, dermabrasion, and lasers. Each of these methods is associated with significant disadvantages.

OBJECTIVE

The purpose of these initial studies was to determine the efficacy and safety of a new electrosurgical resurfacing system. Depth of cutaneous injury was also evaluated.

METHODS

Postoperative scar resurfacing was performed on six patients in the initial feasibility study. Patients were evaluated with questionnaires, physician observations, and photographs. The histologic investigation evaluated depth of injury after resurfacing at various power settings and number of passes.

RESULTS

Appearance of postoperative scars in all 6 patients was improved by electrosurgical resurfacing. The overall injury, residual thermal damage plus ablation, for all power levels and passes was 114.1 micrometer (mean) with a standard deviation of 60.7 micrometer.

CONCLUSION

Electrosurgical resurfacing may become an effective and safe alternative to current resurfacing modalities.

Xanthomonas maltophilia infection presenting as erythematous nodules

Xanthomonas (Pseudomonas) maltophilia is increasingly being recognized as an opportunistic pathogen in hospitalized and debilitated patients. We describe X. maltophilia cellulitis in a neutropenic patient undergoing consolidation chemotherapy for acute lymphocytic leukemia. The patient had multiple, erythematous, nonulcerated nodules on the lower extremities. A biopsy specimen showed numerous gram-negative bacilli in the dermis and subcutis, without evidence of vasculitis. Tissue culture and subsequent blood cultures grew X. maltophilia. The cutaneous nodules and positive blood cultures resolved after treatment with intravenous ciprofloxacin and trimethoprim-sulfamethoxazole.

Glycolic acid peels for postinflammatory hyperpigmentation in black patients. A comparative study

BACKGROUND

Treatment of postinflammatory hyperpigmentation in patients of Fitzpatrick skin types IV, V, and VI is difficult. Glycolic acid peels are useful for pigment dyschromias in caucasians; however, there are no controlled studies examining their safety and efficacy in dark-complexioned individuals.

OBJECTIVE

To determine if serial glycolic acid peels provide additional improvement when compared with a topical regimen of hydroquinone and tretinoin.

METHODS

Nineteen patients with Fitzpatrick skin type IV, V, or VI were randomized to a control or peel group. The control group applied 2% hydroquinone/10% glycolic acid gel twice daily and 0.05% tretinoin cream at night. The peel patients used the same topical regimen and, in addition, received six serial glycolic acid peels (68% maximum concentration). Patients were evaluated with photography, colorimetry, and subjectively.

RESULTS

Sixteen patients completed the study. Both treatment groups demonstrated improvement, but the patients receiving the glycolic acid peels showed a trend toward more rapid and greater improvement. The peel group also experienced increased lightening of the normal skin.

CONCLUSIONS

This pilot study demonstrates that serial glycolic acid peels provide an additional benefit, with minimal adverse effects, for the treatment of postinflammatory hyperpigmentation in dark-complexioned individuals.

Carbamazepine therapy in neuropsychiatric patients

We reviewed the charts of 106 patients treated with carbamazepine. Age, sex, race, seizure type, seizure focus, age at onset, duration of epileptic illness, reasons for discontinuing treatment, other medications, and response to treatment of seizures, psychiatric symptoms, and behavioral symptoms were recorded. Statistical analysis was done to determine clinical factors influencing response to carbamazepine. Increasing duration of epileptic illness leads to a decreased response to carbamazepine, which controls both seizure and behavioral symptoms effectively; concurrent medication decreases behavioral symptom control without affecting the control of the seizures. We found a strongly negative correlation between duration of seizures and improvement of psychiatric symptoms with carbamazepine therapy. We provide a clinical profile of the carbamazepine responder to guide clinicians in their use of this drug.

Carbamazepine as therapy for psychiatric sequelae of herpes simplex encephalitis

We have presented a case of herpes simplex encephalitis that is interesting in that seizure activity was detected in mesial temporal structures, without manifestations of seizure activity except for severe emotional lability with explosive emotional outbursts. Response to carbamazepine (Tegretol) included marked reduction in EEG-detected seizure activity and in the frequency of emotional outbursts, extending to one year after treatment.

Metabolism and mechanisms of action of 9-(tetrahydro-2-furyl)-6-mercaptopurine in Chinese hamster ovary cells

The mechanisms of action of 9-(tetrahydro-2-furyl)-6-mercaptopurine (THFMP) have been studied in Chinese hamster ovary (CHO) cells in tissue culture. THFMP is relatively unstable in physiological buffers, being facilely converted to 6-mercaptopurine (6-MP) even in the absence of cells. Consequently, THFMP undergoes metabolic conversions characteristic of 6-MP, namely formation of 6-thioIMP and incorporation into DNA as 6-thio-guanine (6-TG) nucleotide. A number of purines are capable of preventing the toxicity of THFMP in wild-type cells in a manner similar to that of 6-MP. However, exogenous purines and pyrimidines did not prevent the toxicity of THFMP to cells deficient in the enzyme, hypoxanthine-guanine phosphoribosyltransferase (EF 2.4.2.8; HGPRTase). Cells lacking HGPRTase were 20--40-fold resistant to 6-TC and 6-MP but were only 2--4-fold resistant to THFMP. Furthermore, the time-course for killing CHO cells deficient in HGPRTase was different from that in wild-type cells containing the enzyme. There was no apparent effect of THFMP on the utilization of precursors for DNA, RNA or protein synthesis in the enzyme-deficient mutant cell line. The results suggest that THFMP is converted non-enzymatically to 6-MP and shares its mechanisms of action in wild-type cells containing HGPRTase, i.e., inhibition of de novo purine biosynthesis and incorporation into DNA as 6-TC nucleotide. However, the mechanism of action of THFMP in cells lacking HGPRTase is probably unique and is presently unknown.

Carbohydrate preferences of mammalian cells

Carbohydrate preferences of mammalian cells can be utilized to biochemically distinguish between different cell lines. Ninety-three carbohydrates were examined of which (a) 15 supported cell proliferation and (b) 42 were toxic or growth inhibitory. The present investigation has employed an enzymatic system to eliminate trace glucose levels from reagents and glucose generated by serum enzymes.