A recent study reveals a disturbing trend: private equity takeovers of hospitals are linked to a rise in deaths among Medicare patients in emergency departments. This is not an isolated incident, but rather part of a larger pattern of concerning outcomes.
This new research, published in the Annals of Internal Medicine, adds to a growing body of evidence. Previous studies have already shown that private equity acquisitions of healthcare facilities often lead to worse patient outcomes, including increased mortality rates.
Martin Kenney, a distinguished professor at the University of California, Davis, puts it bluntly: "Private equity takes over things in the medical field, quality goes down, prices go up."
The evidence is mounting. Studies have found increased deaths in nursing homes, more post-operative complications, and even a rise in hospital-acquired infections and injuries following private equity buyouts. The Department of Health and Human Services even condemned private equity's role in worsening patient outcomes toward the end of the Biden administration.
The latest study compared 49 hospitals acquired by private equity firms with 293 hospitals under non-private equity control. The results were stark: private equity-owned hospitals had fewer staff, lower salaries, and, crucially, seven more deaths per 10,000 patients in their emergency departments. This translates to approximately 700 excess deaths among the one million emergency department visits analyzed. All patients in the study were Medicare recipients.
Zirui Song, a Harvard Medical School professor and study author, highlights that cutting staff in emergency departments, which often serve critically ill patients, can be particularly dangerous. Conditions like trauma, respiratory failure, sepsis, heart attack, and stroke demand immediate and comprehensive care. Medicare patients, who tend to be older and have more health conditions, are especially vulnerable. The study found that private equity hospitals cut emergency department salaries by an average of 18.2% and reduced the number of full-time employees by 11.6%.
But here's where it gets controversial... Private equity-owned facilities are also known to transfer higher-risk patients to other hospitals to reduce costs. Song's study revealed that these hospitals transfer 12% more emergency patients.
And this is the part most people miss... Despite these transfers, which one might expect to improve outcomes for those remaining, mortality rates still increased. Song finds this "concerning."
What are the implications? Song urges policymakers to consider the impact of cost-cutting measures in hospitals. While some cuts might improve efficiency, others can be detrimental to patient care.
Kenney believes meaningful policy changes to hold private equity firms accountable are unlikely. Currently, it's difficult to sue these firms directly. Instead, lawsuits target the hospitals themselves, which can then declare bankruptcy, leaving harmed patients with little recourse. To change this, Congress would need to pass a law holding private equity firms responsible for their portfolio companies' actions, but Kenney sees little prospect of that happening soon.
Why is this so difficult? Both Republican and Democratic members of Congress have billions invested in private equity firms. Even high-ranking officials, like the Secretary of Treasury, have connections to private equity.
Unlike other industries where consumers can choose to avoid companies with poor practices, emergency room visits often lack such choices.
What do you think? Does this information change your view on private equity's role in healthcare? Do you believe there are effective solutions to protect patients from these concerning trends? Share your thoughts in the comments below!
