Doug Curran’s family medical practice in Athens, Texas — with a surrounding population of about 20,000 — employs 14 doctors who pride themselves on an intimate knowledge of their community. It’s the kind of practice where one doctor might treat three generations of a single family, and patients sometimes drop off a homemade pie at the office to say thanks. 

So it surprised Curran when he got a call earlier this year from a Florida-based company, United MSO of America, that wanted to explore an investment in the Lakeland Medical Associates practice — suggesting a “big numbers” price tag, Curran said.

The would-be investors said they could help the family medicine group save money by trying "new models of care" to pocket greater payments from insurers, said Curran, who declined to specify the dollar amounts discussed. “Our feeling was the only way you could get those numbers back out of our practice would be to do some things with our patients and to our patients that would not be appropriate,” he said.

Curran’s experience appears to be part of a trend in Texas. Sensing a new vein of potential profits to be mined in the multibillion-dollar health care industry, a small but growing number of private equity firms is seeking to buy into primary care practices, interviews with doctors and financial analysts suggest.

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Policy shifts in the way public programs like Medicare pay for care, financial factors such as low interest rates and changing employment preferences among young doctors are aligning to intrigue investors, experts said.

Consolidation in health care is nothing new, and private equity firms have for years been buying up specialty practices in areas like anesthesiology and radiology. In 2014, the value of health care buyout deals in the United States increased to $15.6 billion, a 60 percent increase from the previous year, according to a recent report from consulting firm Bain and Company.

But the influx of private-equity firms chasing profits in Texas' primary care practices appears to be a recent phenomenon, and it’s unsettling some physicians in the fiercely independent Lone Star State — which has one of the highest rates of doctors practicing privately in the country, according to the Texas Medical Association. Representatives for several independent practices in Texas — who asked not to be identified for reasons of financial privacy — said investors have approached them aggressively, in some cases as often as twice per month.

Doctors like Curran worry that selling the family practice would cost them independence and could mean less personalized care or higher costs for their patients.

But investors say they aren't interested in micromanaging doctors' offices. Rather, they see an opportunity for cost-saving innovation as the health care economy changes from a fee-for-service payment system, which pays doctors for each service they provide, to a value-based care model, which rewards doctors for providing cost-effective treatments. The Obama administration has said it wants 50 percent of payments from Medicare, the federal health insurance program for the elderly, tied to value-based care by 2018.

"There’s been this enormous uptick in hedge funds and even bond funds as well as private equities not interested in acquiring physicians’ practices but having control over their patient base," said Derron DeRouin, chief operating officer at United MSO of America. "It's kind of an ideal model because it allows physicians to maintain their autonomy — keep their practice, essentially — but to be capitalized and grouped together to leverage these numbers and leverage these patients, primarily to the independent provider's advantage."

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"There's been a lot of interest within the state of Texas," he said. "It's an obvious target."

But it's unclear whether the trend will prove profitable in the long term, experts said.

“It’s a mixed bag,” said Kim Ross, a health care consultant and former lobbyist for the Texas Medical Association. “If you go into a disciplined organization that’s got the right platforms and the right incentives and — most importantly — physician leadership, the savings are astronomical."

Private equity firms are “by definition less risk-averse, and it seems to me they’re placing a fairly substantial bet that all these cats can be herded,” Ross said.

There are benefits to consolidation, like improved efficiency and better data management, said state Rep. John Zerwas, R-Richmond, an anesthesiologist. His Greater Houston Anesthesiology practice merged in 2012 with U.S. Anesthesia Partners, backed by investment firm Welsh, Carson, Anderson and Stowe. The group now boasts more than 1,000 anesthesia providers and is better positioned to treat patients more cheaply and effectively, Zerwas said. (The Texas Medical Board estimates there are about 3,500 practicing anesthesiologists in the state.)

“Essentially, nothing changed in terms of how we deliver the anesthesia care,” he said. “We’ve needed a system that really values quality and efficiency, rather than what I call a productivity system, where people are getting paid regardless of outcome.”

Consolidation is occurring in virtually every area of the health care sector, experts said. Large hospital systems, such as Baylor and Scott and White, have merged, and others have purchased physician practices. Health insurance giant Aetna this month announced a $37 billion agreement to buy its smaller rival Humana.

That’s put pressure on doctors’ groups to merge as well. Providers must negotiate prices with the health plans and hospitals they contract with, and larger groups have more bargaining power, Zerwas said.

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“They’re finding that they have to be bigger, stronger, integrated organizations in order to be viable in the marketplace,” he said.

Compared with previous waves of consolidation in the health care market, there are “different X factors” this time around, Ross said.

“There’s different technology, and a younger physician population that is arguably not only more tech savvy, but has different expectations about what they want to be as physicians as a business,” he said.

And those changing market forces could be attractive for venture capitalists and private equity firms, which are more likely to take on financial risk. New payment models, such as a recent move to “bundled payments” in Medicare to pay for knee and hip replacements, offer investment opportunities, said Dan Hosler of the private equity firm Sterling Partners. 

“I think there’s going to be some interesting business models where you can really invest against that,” he said.

Then there’s the fact that the health care economy has shown sustained growth compared with other sectors.

“From a venture capital standpoint, there are very few places to make money in the market right now,” said Tom Banning, chief executive of the Texas Academy of Family Physicians. Interest rates are low, and with falling oil prices and uncertainty in international financial markets like Greece hurting the market, “health care is really the growth opportunity,” he said.

Financial analysts also raised the possibility that Texas could expand its Medicaid program in coming years using federal money under the Affordable Care Act, potentially bringing another million Texans into the health insurance system — though the state’s Republican leadership has so far vehemently opposed any such move. Medicaid in Texas largely operates under a privatized managed care system, a value-based model in which primary care doctors serve a central role as gatekeepers for patients seeking specialty treatment. Investors looking to buy family practices may be hedging their bets that the politics of Medicaid expansion in Texas will change in the coming years, leading to new opportunities to contract with the state.

Meanwhile, many doctors find themselves wondering how long they can remain in independent practice. The Texas Medical Association recently announced a joint program with insurer Blue Cross Blue Shield of Texas meant to help doctors transition to new payment models and “offer physicians options to remain independent.”

“The forces are aligned to force consolidation, and frankly, how those independent doctors are able to compete against well-heeled, deep-pocketed systems or networks is going to be a problem,” Banning said. “To me the question becomes, if a for-profit, publicly traded or privately held venture capital fund owns these doctors, what’s their fiduciary duty to the patients? This is a market that’s going to force changes.”

Disclosure: The Texas Medical Association, Blue Cross Blue Shield of Texas and Baylor Scott and White are corporate sponsors of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.