Impact of Private Equity Acquisitions on Hospital Patient Outcomes

Recent research has revealed concerning trends in patient outcomes at hospitals that have been acquired by private equity firms. An analysis published in the Annals of Internal Medicine assessed the effects of these acquisitions on staffing levels and patient care, particularly focusing on emergency departments (EDs) and intensive care units (ICUs).

According to the findings, hospitals under private equity ownership significantly reduced their salary expenditures and staffing compared to their non-private equity counterparts. This reduction in resources has been linked to detrimental changes in patient care metrics, including increased mortality rates in emergency departments and a rise in patient transfers to other facilities.

The comprehensive study analyzed data from hospitals acquired by private equity firms between 2010 and 2017, comparing them with control hospitals that remained independent. Researchers from reputable institutions, including the University of Pittsburgh and Harvard Medical School, utilized hospital cost report data from the RAND Corporation, alongside Medicare claims data from 2009 to 2019.

Key findings indicate that private equity hospitals experienced an 18.2% reduction in salary expenditures for emergency departments and a 15.9% decrease for ICUs when compared to pre-acquisition levels. Furthermore, while control hospitals increased their average full-time employees, private equity hospitals saw a decline in staffing numbers.

This decrease in manpower has manifested in a troubling increase in in-hospital mortality rates among patients treated in emergency departments, which rose by 13.4% in private equity hospitals. In contrast, control hospitals reported a decrease in mortality rates. The study also noted that transfers from emergency departments to other acute care hospitals increased by 4.2%, while ICU transfers surged by 10.2% post-acquisition. Additionally, the average length of stay in ICUs decreased by 4.7%, raising concerns about the quality of care being delivered.

These findings suggest that the financial strategies employed by private equity firms, particularly the emphasis on cutting costs, could be adversely affecting the standard of care provided in these facilities. As the healthcare landscape continues to evolve, understanding the implications of private equity involvement in hospital management is crucial for ensuring patient safety and quality care.