Private Equity Firms are Scooping Up Local Hospitals, and Patients are Paying the Price

January 16, 2024

Voices For Affordable Health has reported how costs rise when private equity firms invest in your local hospital. Now we’re learning that those acquisitions also raise important questions about the quality of patient care.

A recent study published in JAMA found that hospitals purchased by private equity investment firms experienced a 25% increase in adverse events, such as surgical infections and bed sores. There was also a nearly 38% increase in central line infections and a 27% rise in patient falls.

The study, which focused on Medicare patients, points to cost-cutting measures, including staff reductions negatively affect the quality of care.

“This is a big deal because it’s the first piece of data that I think pretty strongly suggests that there is a quality problem when private equity takes over,” Dr. Ashish Jha, the dean of the Brown University School of Public Health, told the New York Times.

Luckily, the study did not find an increase in patient deaths, which researchers say may be because of a shift toward admitting patients who are healthier.

Hospitals with a history of problems may be fined by the government, and, most recently, Congress opened a bipartisan investigation into private-equity-owned hospitals and the effects on patients.

“As private equity has moved into health care, we have become increasingly concerned about the associated negative outcomes for patients,” Senator Sheldon Whitehouse (D-R.I.) said in a press release. “From facility closures to compromised care, it’s now a familiar story: private equity buys out a hospital, saddles it with debt, and then reduces operating costs by cutting services and staff—all while investors pocket millions. Before the dust settles, the private equity firm sells and leaves town, leaving communities to pick up the pieces.”

While more evidence is being gathered, this study raises valid concerns about the potential negative effects of private equity ownership on hospital quality and patient safety.

Have you had any experiences with a private-equity-owned hospital? We want to hear your story!