According to a study on Medicare claims for more than 4,500,000 hospital admissions, hospital-acquired adverse events or conditions, including falls and infections, increased by approximately 25% in hospitals acquired by private equity compared to control hospitals.
The corresponding author, Dr. Zirui Song of Harvard Medical School, Boston, in an interview stated „Previous research on Private Equity in healthcare has shown that acquisitions are associated with higher fees, prices, and spending. However, the impact on the quality of care and patient outcomes is still poorly understood. This is especially true for measures of clinical quality that are less susceptible to changes in patient mix or coding behavior, such as hospital-acquired adverse events.“
The study published in JAMA compared data from 100% Medicare Part A claims for 662,095 hospital admissions in 51 hospitals acquired by private equity and 4,160,720 hospital admissions in 259 control hospitals. The admissions occurred between 2009 and 2019. The researchers also used a difference-in-differences design to evaluate hospital admissions three years before and three years after acquisition, while controlling for patient and hospital attributes.
Hospital-acquired adverse events defined by the US Centers for Medicare & Medicaid Services included falls, infections, stage III or IV pressure ulcers, retained foreign objects after surgery, air embolism, and blood incompatibility.
Overall, Medicare patients in private equity hospitals experienced a 25.4% increase in hospital-acquired conditions over a period of up to three years after acquisition compared to those in control hospitals, with a difference of 4.6 additional hospital-acquired conditions per 10,000 hospital admissions (P = .004). 37.7% of the increase was attributed to central-line-associated bloodstream infections (P = .04), while central line placements decreased by 16.2% and falls accounted for 27.3% (P = .02).
Notably, the incidence of postoperative wound infections increased from 10.8 per 10,000 hospital admissions before acquisition to 21.6 per 10,000 hospital admissions after acquisition, despite a decrease in surgical volume by 8.1%. In contrast, the number of postoperative wound infections decreased in control hospitals during the study period.
While hospital mortality decreased slightly in private equity hospitals compared to control hospitals, there was no differential change in mortality within 30 days after discharge from the hospital. The slight difference could be attributed to the trend of treating somewhat younger Medicare beneficiaries in private equity hospitals; the likelihood of these patients being dual-eligible or discharged to other hospitals was lower, and the likelihood of them being transferred to other hospitals was higher, the researchers noted.
The results were constrained by several factors, including the lack of generalizability to all hospitals acquired by private equity and non-Medicare patients, the use of International Classification of Diseases codes, Ninth Revision (ICD-9) and Tenth Revision (ICD-10) that may not capture all hospital-acquired conditions, and the inability to account for all confounding factors.
However, the findings suggest that private equity acquisitions are associated with an increase in hospital-acquired adverse events, raising concerns about the impact of private equity owners on healthcare, conclude the researchers.
In a similar story published in July 2023, Medscape Medical News described a report that found a correlation between private equity ownership of physician practices and increased consumer prices for several medical specialties.
Dr. Robert Glatter, an emergency physician at Lenox Hill Hospital, New York, NY, stated in an interview, „The exponential growth of private equity ownership in hospitals and physician practices in recent decades has led to the majority of healthcare providers being disenchanted with cost-cutting practices that result in staffing reductions and ratios that compromise patient care as part of their lean approach to managing clinical operations.“
„Looking at patient outcomes, it is ultimately the patients who pay the price – not the shareholders,“ Glatter said. „This leads to a higher risk of hospital-acquired complications, including falls and bloodstream infections, including site infections following surgery, as noted by the authors of the current study when private equity took over operation in hospitals.“
Treating younger and healthier patients, and fewer Medicare and Medicaid patients combined with more hospital transfers to non-private equity owned hospitals, led to lower short-term hospital mortality following the acquisition, he added.
„The explosive increase in hospital mergers and consolidations in recent decades has led to a sharp rise in healthcare costs at the expense of patient satisfaction, but also the autonomy of healthcare providers in managing and maintaining high-quality care for their patients,“ said Glatter. „It is important to understand that the interests of private equity are primarily aligned with those of their shareholders, not with the outcomes and interests of patients.“
Further research is needed to investigate the potential clinical impacts of private equity acquisitions across the healthcare system and the potential effects of policy measures aimed at protecting patients and societal resources, Song, co-author of an article presenting a policy framework for dealing with private equity in healthcare, published in JAMA in April 2023, concluded.