Analysis reveals increased mortality in emergency departments and staffing cuts at hospitals acquired by private equity, giving policymakers more reason for concern.
A new study is once again raising alarms over the impact of private equity ownership in hospitals.
Emergency departments of hospitals acquired by private equity firms had a higher rate of patient deaths than similar hospitals not owned by private equity, according to results published in Annals of Internal Medicine.
Researchers from Harvard Medical School (HMS), the University of Pittsburgh, and the University of Chicago analyzed Medicare claims and hospital cost reports from 2009 to 2019, looking at more than a million emergency department visits and over 120,000 ICU hospitalizations in 49 hospitals taken over by private equity firms. They compared those figures to over six million visits and more than 760,000 hospitalizations in 293 similar hospitals that weren’t acquired by private equity.
The findings reveal fatal consequences for patients and significant repercussions for workers at private equity-owned hospitals. Following a private equity deal, emergency department deaths increased by seven per 10,000 visits, representing a 13% rise from the baseline of 52 deaths per 10,000 visits. The study also found that after acquisitions, hospitals cut salary spending by 18% in emergency departments and by 16% in ICUs.
Overall, private equity-owned facilities reduced their full-time employees by 11.6% and slashed hospital-wide salary expenditures by 16.6% relative to non-acquired hospitals.
Those cuts appear to have had ripple effects. The study reported shorter ICU stays and more frequent patient transfers to other hospitals, suggesting limited capacity to handle high-risk cases. The results line up with previous research showing increases in preventable adverse events, like infections, in private equity-owned hospitals, the authors noted.
“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
“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.”
While the study doesn’t prove causation and is limited to Medicare patients, it further shines a light on the tension between financial efficiency and patient safety at hospitals acquired by private equity.
For hospital leaders, the analysis provides more data that staffing and resourcing decisions made during private equity ownership can have real impact on patient outcomes.
As the role of private investment in healthcare continues to expand, the authors argue that policymakers and regulators will need to weigh not just the financial sustainability of these deals, but their potential impact on lives.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Emergency department deaths at increased by 13% after private equity acquisitions, adding seven deaths per 10,000 visits, researchers found.
Hospitals cut emergency department salary spending by 18% and ICU salary spending by 16%, with overall staff reduced by 11.6%.
Shorter ICU stays and more patient transfers are indicative of reduced capacity, emphasizing the tension between financial returns and patient safety.