A comprehensive nationwide analysis led by Harvard Medical School researchers has uncovered a troubling correlation between private equity takeovers of hospitals and a decline in the quality of patient care. The study, published in JAMA on Dec. 26, highlights an increased likelihood of patients experiencing preventable harm, such as falls and infections, during their hospital stays following acquisition by private equity firms.
The research, examining data from over 600,000 fee-for-service Medicare hospitalizations between 2009 and 2019, sheds light on the potential consequences of private equity's growing role in the U.S. healthcare system, with a staggering $1 trillion invested in the past decade.
"We had previously found that private equity acquisitions led to higher charges, prices, and societal spending," noted Zirui Song, associate professor of health care policy and medicine at Harvard Medical School. "Now, we're learning that there are also downstream concerns for the clinical quality of care delivered to hospital patients."
The study reveals a 25% increase in hospital-acquired complications for Medicare patients admitted after private equity acquisitions, compared to those admitted before the acquisition. Notably, patients experienced a 27% rise in falls and a 38% increase in bloodstream infections caused by central lines.
Despite placing fewer central lines, private equity hospitals demonstrated these adverse outcomes, suggesting potential conflicts between profit incentives and patient safety.
While the research identified a small decrease in hospital deaths at private equity-owned hospitals, the authors attribute this to demographic factors, including younger and less disadvantaged patient populations. Policymakers, insurance companies, and public sector bodies are urged to address concerns about patient safety and societal resources in the wake of private equity transactions.
The study's authors propose a policy framework to regulate fraud and abuse, enhance antitrust oversight, reduce moral hazard, protect against inflated prices, and increase transparency in reporting private equity acquisitions. Currently, only acquisitions exceeding $111.4 million are required to be reported, leaving many physician practice acquisitions unaccounted for.
"Private equity firms have historically operated in the shadows in health care," emphasized HMS research fellow Sneha Kannan. "Going forward, it's important to lift the veil and increase transparency." The researchers stress the need for rigorous efforts to understand how private equity influences healthcare operations and its broader consequences, emphasizing the shared interest of patients, providers, investors, taxpayers, employers, and insurers in comprehending the corporatization of healthcare delivery.
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