Decline in Patient Outcomes at Hospitals Acquired by Private Equity Firms

Recent research indicates that hospitals acquired by private equity firms are experiencing deteriorating patient outcomes. A comprehensive analysis comparing staffing levels and clinical results before and after acquisition shows significant reductions in staffing expenditures, especially in emergency departments (EDs) and intensive care units (ICUs). Private equity hospitals cut salary expenses and overall staffing, leading to increased patient transfers, shorter ICU stays, and higher ED mortality rates.

The study, published in the Annals of Internal Medicine, utilized data from hospital cost reports and Medicare claims from 2007 to 2019, focusing on establishments acquired between 2010 and 2017. It revealed that these hospitals reduced ED and ICU salary expenditures by approximately 18.2% and 15.9%, respectively. Furthermore, they decreased their number of full-time employees, contrasting with control hospitals that increased staffing.

Clinically, hospitals under private equity ownership saw a 13.4% rise in in-hospital ED mortality and an increase in transfers to other acute care facilities—4.2% for ED transfers and 10.2% for ICU transfers. ICU length of stay also shortened by 4.7%. These findings suggest that cost-cutting measures, notably staffing reductions, may compromise patient care quality and safety.

The research underscores the potential risks associated with private equity ownership in healthcare, highlighting that amplified cost pressures could be linked to adverse clinical outcomes. These trends emphasize the importance of maintaining adequate staffing levels to ensure patient safety and high-quality care in hospital settings.

This study sheds light on the broader implications of financial strategies in healthcare institutions and their potential impact on patient health outcomes.