A recent nationwide study has uncovered troubling trends in patient mortality rates within U.S. hospitals acquired by private equity firms. Conducted by researchers from Harvard Medical School, the University of Pittsburgh, and the University of Chicago, the study highlights a significant increase in death rates in emergency departments (EDs) of these hospitals compared to their non-private equity counterparts.
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According to the study, published on September 23 in the Annals of Internal Medicine, Medicare beneficiaries at private equity-owned hospitals experienced an alarming rise of 7.0 additional deaths per 10,000 ED visits post-acquisition, marking a 13.4% increase from a baseline of 52.4 deaths per 10,000.
While intensive care unit (ICU) mortality rates remained unchanged, the study noted a 4.2% and 10.6% increase in patient transfers from EDs and ICUs respectively, as opposed to control hospitals that are not owned by private equity firms.
Acquisition by Private Equity Firms Results in Financial Pressures and Hospital Staffing Cuts
The federally funded study attributes these increased mortality rates to drastic staffing and salary cuts implemented by private equity firms, which are often implemented to enhance financial returns. Following acquisition, private equity hospitals reduced ED salary expenditures by 18.2% and ICU salary expenditures by 15.9% in comparison to control hospitals. Additionally, there was an average reduction of 11.6% in full-time employees and a 16.6% cut in salary expenditures across the hospitals.
According to Zirui Song, senior author and associate professor of healthcare policy at Harvard Medical School, private equity firms often cut staff to generate financial returns. Song emphasized that these reductions could directly impact patient care quality, leading to the observed rise in mortality rates.
Private Equity’s Broader Impact on U.S. Healthcare
These findings add to growing concerns about the impact of private equity on the U.S. healthcare system. Another study, published in the JAMA Network earlier this year, warned of a potential hospital bed shortage in the country, which could result in a critical healthcare capacity crisis by 2032. The shortage is attributed not to an increase in hospitalizations but to a 16% reduction in staffed hospital beds due to financial strategies like those used by private equity firms.
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An earlier study also published in JAMA revealed a 25% increase in preventable adverse events, such as infections, in hospitals acquired by private equity firms.
Private equity firms acquire healthcare facilities using investor funds and loans, placing financial obligations on the acquired medical providers. This model has been applied to hundreds of hospitals and nursing homes across the U.S., raising questions about the sustainability and ethics of profit-driven healthcare models.
