Private equity investments in healthcare have risen from $23.1 billion in 2015 to $78.9 billion in 2019.
Hospitals acquired by private equity (PE) firms experienced increases in net income as well as improvement with quality metrics, according to a JAMA study released Monday.
Compared to non-acquired hospitals, PE-bought provider organizations saw a mean increase in annual net income of more than $2.3 million, an increase of $407 in total charge per inpatient day, and an increase of 0.31 in total charge to cost ratio.
On the quality side, JAMA found that the aggregate quality score for acute myocardial infarction increased 3.3%, while the aggregate score for pneumonia increased 2.9%.
Additionally, the JAMA report found that PE investments in healthcare have risen from $23.1 billion in 2015 to $78.9 billion in 2019.
Related: The Role of Private Equity in Driving Up Healthcare Prices
In the report's conclusion, the authors stated that the report, "offers an initial national assessment of changes in hospital-level economic and quality measures associated with private equity acquisition."
"Although further research is needed, our findings suggest that policy makers should consider monitoring or thoughtful oversight of changes in care delivery and billing practices in hospitals acquired by private equity firms to ensure proper stewardship of societal resources and the prioritization of patient interests," the authors wrote.
Related: Life and Debt at a Private Equity Hospital
Monday's report is the latest research released by JAMA on the continuing investments made by PE in the healthcare sector.
In February, a JAMA report found that there were more than 350 physician practice acquisitions by PE firms between 2013 to 2016.
Despite findings that point to increased activity among PE around the physician practice space, including in years beyond the study's scope, researchers said there remain "unknown implications for care delivery and patient outcomes."
Related: Private Equity Continues to Buy More Physician Practices
Similarly, a Health Affairs study released in early June found that acquisitions of ophthalmology practices doubled from 2017 to 2018.
According to Buyouts, a HealthLeaders sister publication, PE investors began switching their focus from hospital acquisitions to less-costly, smaller healthcare specialties back in 2018.
Related: Private Equity Ophthalmology Acquisitions Doubled From 2017 to 2018
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.