Healthcare Policy December 27, 2023

Does Private Equity Ownership Enhance Patient Care?

by Barry P Chaiken, MD

While private equity (PE) strives to reduce costs and increase profits in companies it purchases, a recent JAMA article provides evidence that such purchases lead to an increase in adverse events and an overall decrease in quality of care.

The study compared data from 662,095 hospitalizations at 51 private equity-acquired hospitals to 4,160,720 hospitalizations at 259 matched control hospitals not acquired by private equity from 2009 to 2019.

The researchers found that after the private equity acquisition, Medicare beneficiaries admitted to private equity hospitals experienced a 25% increase in hospital-acquired conditions compared to those treated at control hospitals. This increase was driven by a 27% rise in falls and a 38% rise in central line-associated bloodstream infections at private equity hospitals despite placing 16% fewer central lines. After the acquisition, surgical site infections also doubled at private equity hospitals, even as they performed 81% fewer surgical procedures.

In-hospital mortality decreased slightly at private equity hospitals compared to controls. However, patients at private equity hospitals were modestly younger, less likely to be dually eligible for Medicare and Medicaid, and had higher coded comorbidities. They were also more often transferred to other acute care hospitals after shorter lengths of stay. There was no difference in 30-day mortality.

As PE expands its ownership of provider organizations, consumers must be cautious when choosing care at a PE-owned hospital. Checking Medicare Star Ratings for a hospital is an excellent first step in evaluating its quality of care, safety, and patient experience.

Source: Changes in Hospital Adverse Events and Patient Outcomes Associated With Private Equity Acquisition, JAMA, December 26, 2023

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