Private equity Ownership of Hospitals Linked to increased ED Deaths, Staffing Cuts
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A new study published in Annals of Internal Medicine reveals a concerning link between hospitals acquired by private equity firms and a rise in mortality rates in emergency departments, alongside important reductions in staffing and salary expenditures. The research analyzed data from 760,377 ICU hospitalizations across 293 matched control hospitals, finding possibly “risky, even deadly consequences” for Medicare patients.
Key Findings of the Study
researchers found that after a hospital was acquired by a private equity firm, several key changes occurred compared to a control group of similar hospitals:
* Reduced Spending: Private equity-owned hospitals decreased emergency department (ED) and intensive care unit (ICU) salary expenditures by 18.2% and 15.9% per inpatient bed day, respectively.Hospital-wide, full-time employee numbers fell by 11.6% and salary expenditures decreased by 16.6%.
* Increased ED Mortality: There were 7.0 additional deaths per 10,000 visits in the EDs of hospitals owned by private equity firms,relative to control hospitals.
* No Change in ICU Mortality: The study did not find a statistically significant difference in mortality rates within the ICUs of private equity-owned hospitals compared to controls.
* Increased Hospital Transfers: Patients in private equity-owned EDs and ICUs experienced a 4.2% and 10.6% increase in transfers to other acute care hospitals, respectively. This suggests a potential strain on resources or a lack of specialized care.
* Shorter ICU Stays: Average ICU length of stay was reduced by 0.2 days.While seemingly positive, this reduction occurred alongside other changes that raise concerns about quality of care.
The Role of Staffing Cuts
The study authors suggest that staffing cuts are a primary driver of the observed negative outcomes. Zirui Song, MD, PhD, from Harvard Medical School and Massachusetts general Hospital in Boston, explained that these cuts are “one of the common strategies used to generate financial returns for the firm and its investors.” The research indicates that these financial strategies may have detrimental effects, particularly for vulnerable patients like those covered by Medicare.
Growing Concerns About Private Equity in Healthcare
This study adds to a growing body of research raising concerns about the increasing role of private equity in the healthcare industry. Private equity firms often acquire hospitals with the goal of increasing profitability, which can lead to cost-cutting measures that impact patient care.These measures can include reducing staffing levels, limiting services, and increasing prices.
A 2023 report by the American Economic Liberties Project found that private equity-backed hospitals are more likely to close than independent hospitals, particularly in rural areas, further limiting access to care. https://www.economicliberties.org/report/private-equity-hospital-closures/
Potential Implications and Future Research
The findings of this study highlight the need for increased scrutiny of private equity investments in healthcare.Policymakers may need to consider regulations to ensure that patient safety and quality of care are prioritized over financial gains. Further research is needed to understand the long-term effects of private equity ownership on hospital performance and patient outcomes. Specifically,investigations into the quality of care provided during shorter ICU stays and the reasons behind increased hospital transfers are warranted.
abstract/Full Text: https://www.acpjournals.org/doi/10.7326/ANNALS-24-03471
Key Takeaways:
* private equity acquisition of hospitals is associated with reduced staffing and salary expenditures.
* ED mortality rates increased in hospitals acquired by private equity firms.
* Increased hospital transfers suggest potential strain on resources.
* The study raises concerns about the prioritization of profits over patient care in private equity-owned hospitals.