Insurance companies are seeing significantly higher anesthesia bills from private equity-backed physician management companies than from practitioners who keep their staffing and management services in house, according to a study published Monday in JAMA.

Researchers found physician management companies with private equity funding charged over 16.5% higher prices than those without. The study reviewed data from over 2.2 million privately insured patients at over 3,600 facilities who received anesthesia services from Jan. 1, 2012 to Dec. 31, 2017 .

In addition to anesthesia costs, the researchers found that practitioners’ out-of-network status affected rates when contracting with physician management companies, particularly those backed by private equity.

While physician management companies increased prices across the board, those with private equity backing charged the most, according to the study. Anesthesiologists with private equity funding increased costs by 25% compared to 17% who used physician management services without private equity, according to the study.

Ambar La Forgia, one of the study’s authors and an assistant professor at the Columbia University Mailman School of Public Health, said the original goal of the study was to understand “what happens when these management companies come in.” Along the way, the researchers discovered that private equity had a large stake in anesthesiology, and they shifted to explore the financial effects of corporate investment in the field.

Like radiology, urology and ophthalmology, anesthesiology is one of many healthcare fields being swarmed by private equity. Anesthesia is administered over 100 million times annually and carries a high profit margin, presenting an easy target for corporate investment by way of contracting with physician management companies, according to the study.

Anesthesia providers are also a fragmentedless efficient hospital-based specialty, which makes it a prime target for consolidation, according to Gary Herschman, an attorney at Epstein Becker & Green. Corporate investors are eager to pool specialists and build in-house rosters of doctors, giving private equity networks a competitive edge in the industry.

“A larger organization with a seasoned corporate infrastructure with substantial access to capital to compete [and] to grow is becoming more and more important, and there’s a lot of advantages to being part of a larger organization,” Herschman said. “I think bigger is better, and that’s what we are seeing — that we need to get bigger to be able to compete and have capital to invest in growth.”

While there is a correlation between private equity and costlier anesthesia services, it’s not clear if the price increases are justified, La Forgia said.

“Who is this good for? Who is this bad for? That’s the major question that still remains,” she said.

Private equity investments can increase profits for shareholders and bring in more money for physicians, she said. Contracting with physician management companies to offload administrative tasks, while a premium, can also save providers time and allow them to perform higher-cost work.

However, the patient can’t choose an anesthesiologist based on physician management companies, leaving them helpless in the process and subject to higher costs, she said.

“Prices going up, ultimately, are going to hurt the patient. They’re going to have higher out-of-pocket costs and cost sharing. So whatever their copay is, or their deductible, if the care costs more — they’re going to be paying more,” La Forgia said. “Patients have almost no say in the matter.”