PROVIDENCE, R.I. – A new study from Brown University reveals that the surge in private equity (PE) acquisitions of opioid treatment programs (OTPs) has not demonstrably improved access to treatment, despite a significant increase in such transactions linked to changes in Medicare coverage.
The study, published recently, found that the percentage of OTPs acquired by PE firms rose dramatically from 0.26% in 2011 to 18.9% in 2022,coinciding with Medicare begining to cover methadone treatment in 2020. This regulatory shift created a new revenue stream for investors, but hasn’t translated into wider patient access. while methadone shipments were approximately 13% higher in PE-acquired OTPs compared to non-acquired and PE-exposed facilities, these differences were not statistically significant when accounting for other factors.
“With all these payment changes, it sort of led to an untapped revenue stream for investors because they’ve suddenly discovered a lucrative area thanks to regulatory changes that make payments more favorable,” explained researcher dr. Sindhu Singh. The findings raise concerns as PE acquisitions in other healthcare sectors, such as nursing homes and primary care physician practices, have been linked to declines in patient care or increased costs.
Researchers caution that it’s unclear whether increased methadone supply at acquired OTPs predates the acquisitions themselves. “We can’t say for certain that it was a result of the acquisition itself,” Singh added. The study represents one of the first attempts to assess the impact of PE investment on the quality and accessibility of OTPs, and highlights the need for further research to understand the long-term consequences for patients.
Singh noted that PE investment could potentially benefit treatment access if capital is used to upgrade technology or extend operating hours. “We need to do a lot more work to understand what this really means for the patient,” she said.
