At a glance:
- Patient deaths increased in the emergency departments of hospitals acquired by private equity firms compared to similar hospitals, a nationwide study has found.
- Researchers linked the increase in mortality to cuts in salary and staffing levels.
- The findings amplify concerns about the growth of this for-profit ownership model in health care delivery.
Patient death rates increased in the emergency departments of U.S. hospitals after the hospitals were acquired by private equity firms compared to similar hospitals not acquired by private equity, according to a nationwide study of hundreds of hospitals conducted by researchers at Harvard Medical School, the University of Pittsburgh, and the University of Chicago.
The results, published Sept. 23 in Annals of Internal Medicine , offer more concrete evidence that this for-profit ownership model of health care has led to higher patient mortality.
The federally funded study also found that private equity hospitals experienced large cuts in staffing and salaries, which the researchers propose is the likely explanation for the increase in patient deaths.
"Staffing cuts are one of the common strategies used to generate financial returns for the firm and its investors," said senior author Zirui Song , associate professor of health care policy in the Blavatnik Institute at HMS and HMS associate professor of medicine at Massachusetts General Hospital, who has published extensively on the implications of private equity in health care .
"Among Medicare patients, who are often older and more vulnerable, this study shows that those financial strategies may lead to potentially dangerous, even deadly consequences," Song said.
The researchers further found that transfers of patients to other hospitals increased and stays in intensive care units shortened after hospitals were acquired by private equity. These findings also suggest that likely because of staffing cuts, hospitals had reduced capacity to care for high-risk patients after being acquired by private equity firms.
Private equity in health care
Private equity is one form of investor-based, private ownership in health care. Private equity firms use funds from investors and lenders to buy health care facilities. The acquired providers take on the obligation to repay that new debt. Hundreds of hospitals and nursing homes, along with thousands of physician practices, have been acquired this way in the United States.
The study compared more than 1 million emergency department visits and 121,000 ICU hospitalizations across 49 private equity hospitals to over 6 million emergency department visits and 760,000 ICU hospitalizations across 293 matched control hospitals. It used 100 percent Medicare Part A and Part B claims and cost report data from 2009 through 2019, which contain the universe of hospitalizations and ED visits for traditional Medicare patients nationwide.
Medicare beneficiaries in the emergency departments of private equity hospitals experienced seven additional deaths per 10,000 visits after acquisition relative to hospitals that were not acquired by private equity, the team found. This rise represented a 13 percent increase from a baseline of 52 deaths per 10,000 visits.
The data showed that after acquisition, the private equity hospitals reduced salary expenditures in the emergency department by 18 percent and in the ICU by 16 percent compared to hospitals not acquired by private equity. They also reduced hospital-wide full-time employees by an average of 11.6 percent and salary expenditures by 16.6 percent relative to non-private-equity hospitals.
One reason these cuts are concerning is that care delivered in emergency departments and intensive care units remains mostly human, face-to-face interactions at the patient's bedside, Song said.
"These are places where cutting staffing often means cutting the capacity to take care of people," Song said. This work builds on a prior study in JAMA that revealed a 25 percent increase in preventable adverse events, including infections, in hospital inpatient wards after private equity acquisition, which were also likely related to these staffing cuts.
Private equity acquisitions in health care are often marketed as an effort to shore up struggling hospitals by providing needed capital investments to improve care. However, in a 2024 study in JAMA Internal Medicine , Song and colleagues found that private equity firms are more likely to buy financially healthier hospitals, which are more capable of taking on the new debt while still generating revenue. While purchasing a struggling facility for the purpose of turning it around can happen, private equity has on average targeted more financially stable hospitals, Song said.
State and federal policymakers have begun to study or regulate private equity buyouts in health care, often involving hospitals. Early efforts have focused on more transparency and oversight of acquisitions, separating corporate influence from clinical practice, regulating some transactions, and related policy levers that aim to retain a role for private capital while protecting patients and clinicians from harm.
Authorship, funding, disclosures
Sneha Kannan, assistant professor of critical care medicine at the University of Pittsburgh, is first author of the study. Additional authors include Joseph Dov Bruch, José R. Zubizarreta, and Jennifer Stevens.
This work was supported by the National Institute on Aging and the National Heart, Lung, and Blood Institute of the National Institutes of Health (grants 3P01AG032952-14S1 and T32HL15502-03) and by the Agency for Healthcare Research and Quality (R01HS029467).
