Cornering Heath-Care Markets

Private equity leads the roll-up of specialized treatment facilities, raising competition worries

- Pat Regnier, Sabrina Willmer

The Florida city of Naples is known for its abundance of white-sand beaches, restaurants, and resorts. But when it comes to cancer care, some residents may find themselves with little choice. A single company, GenesisCare, operates all four of the city’s radiation treatment centers.

GenesisCare got its foothold in Naples after buying another chain, 21st Century Oncology, that grew with backing from private equity investors. Throngs of wealthy people hoping to retire on Florida’s Paradise Coast made it plum territory for the business, according to Isaac Vire, a former radiation therapist at 21st Century. “Naples is kind of a cash cow,” he says.

For years now, private equity has been following a similar strategy in a wide range of medical fields—from anesthesiology to hospice care— buying small practices and putting them under a corporate umbrella. With patients shunning in-person visits and postponing elective surgeries amid the Covid-19 pandemic, solo offices are struggling to stay afloat and are under increased pressure to sell to chains.

The private equity buying spree has raised alarms among doctors, researchers, and antitrust regulators. The concern is that mergers and takeovers are diminishing choices for consumers, potentially undermining quality of care and raising costs. Democratic presidential candidate Joe Biden has said he’d scrutinize anti-competitive behavior in medicine.

For its part, GenesisCare says that operating on a larger scale improves care, because it allows the company to operate more efficiently, hire top practitioners, standardize clinical practices, and engage in research. “All of these are advancements that are great for cancer patients,” it said in a statement.