Patient death rates increased in the emergency departments of U.S. hospitals acquired by private equity firms compared to similar hospitals not acquired by private equity, according to a nationwide study of hundreds of hospitals conducted by researchers at Harvard Medical School, the University of Pittsburgh, and the University of Chicago.
The results, published Sept. 23 in Annals of Internal Medicine, offer more concrete evidence that this for-profit ownership model of health care has led to higher patient mortality.
The federally funded study also found that private equity hospitals experienced large cuts in staffing and salaries, which the researchers propose is the likely explanation for the increase in patient deaths.
“Staffing cuts are one of the common strategies used to generate financial returns for the firm and its investors,” said senior author Zirui Song, associate professor of health care policy in the Blavatnik Institute at HMS and HMS associate professor of medicine at Massachusetts General Hospital, who has published extensively on the implications of private equity in health care.
“Among Medicare patients, who are often older and more vulnerable, this study shows that those financial strategies may lead to potentially dangerous, even deadly consequences,” Song said.
The researchers further found that transfers of patients to other hospitals increased and stays in intensive care units shortened after hospitals were acquired by private equity. These findings also suggest that likely because of staffing cuts, hospitals had reduced capacity to care for high-risk patients after being acquired by private equity firms.
Private equity in health care
Private equity is one form of investor-based, private ownership in health care. Private equity firms use funds from investors and lenders to buy health care facilities. The acquired providers take on the obligation to repay that new debt. Hundreds of hospitals and nursing homes, along with thousands of physician practices, have been acquired this way in the U.S.
The study compared more than 1 million emergency department visits and 121,000 ICU hospitalizations across 49 private equity hospitals to over 6 million emergency department visits and 760,000 ICU hospitalizations across 293 matched control hospitals. It used 100% Medicare Part A and Part B claims and cost report data from 2009 through 2019, which contain the universe of hospitalizations and ED visits for traditional Medicare patients nationwide.