The Executive Suite: What happens to patient care after private equity acquires a hospital?

Thursday, January 18, 2024

What happens to patient care after private equity acquires a hospital?

Hospitalized patients were more likely to experience adverse events—mostly falls and infections—after a hospital was acquired by private equity, a new study finds.

Using Medicare Part A claims, the study’s authors analyzed “hospital-acquired adverse events or conditions”—defined primarily as falls and infections—among 662,000 patients at 51 private equity-acquired hospitals during the three years before and after the acquisition. They compared the results to those of about 4.2 million claims from patients at 259 control hospitals (not owned by private equity).

They found that following private equity acquisition, Medicare beneficiaries in private equity hospitals experienced a 27.3% increase in falls and a 37.7% increase in central line-associated bloodstream infections compared with patients in the control hospitals. This was despite 16.2% fewer percutaneous central lines being placed at private equity hospitals.

Similarly, the rate of surgical site infections at private equity hospitals was twice that of the control hospitals—21.6 versus 10.8 per 10,000 hospitalizations—despite 8% fewer surgeries at the private equity hospitals. “Such increases…may result from decreased staffing, changes in operator technique, poorer clinician experience, increased patient illness or other explanations,” the authors write.

Overall, Medicare beneficiaries admitted to private equity hospitals experienced a 25.4% increase in hospital-acquired conditions post-acquisition than those in hospitals not owned by private equity. The results were particularly surprising given that patients treated at private equity hospitals were found to be slightly younger and less likely to be dually eligible for Medicare and Medicaid, than those in the control hospitals.

However, in-house mortality decreased slightly more at the private equity hospitals—from 3.5% preacquisition to 3.2% post acquisition compared with the control hospitals (3.5% to 3.3%). The authors attribute this to the greater likelihood of patients in private equity hospitals being transferred to other acute care facilities than patients in control hospitals.

The authors note that hospital-acquired adverse events generally are related to staffing ratios and composition, especially among nurses. “Given that private equity firms have reduced staffing and changed the clinician labor mix at acquired hospitals and clinics, an analogous cost-cutting strategy in our sample may explain the increase in hospital-acquired conditions,” they write.

Overall, they conclude, the findings “heighten concerns about the implications of private equity on health care delivery.”

The study, Changes in Hospital Adverse Events and Patient Outcomes Associated With Private Equity Acquisition” appears in the December 26, 2023 issue of JAMA.