Major Errors Climbed After Equity Firms Bought Hospitals

Research is the first to document decline in care after a sale to investors
By Bob Cronin,  Newser Staff
Posted Dec 26, 2023 7:10 PM CST
When Equity Firms Bought Hospitals, Major Errors Rose
Stock photo   (Getty/Yobro10)

Private equity firms own only a small percentage of US hospitals, but they've been working to increase their share for two decades. They've pooled money from institutional investors and individuals to build investment funds that buy up hospitals and related health care entities, often intending to sell them after a few years. Whether the change in ownership has any effect on patient care hasn't much been documented, the New York Times reports. Now, researchers have assembled concerning evidence. In the first three years under equity firm ownership, serious problems among Medicare patients including surgical infections and bedsores, for example, rose 25% more than at hospitals investors hadn't bought.

And patients admitted to hospitals fell 27% more often, said the study, which was published Tuesday in JAMA. At the same time, the study found a nearly 5% drop in the rate of patients dying while staying in the hospital. Researchers said factors that could affect that could include a tendency to accept healthier patients for admittance. There was no difference in the death rates of hospitals under different ownership schemes among patients 30 days after their discharge, per the Times.

The study's lead author said the researchers weren't surprised to find an indicator of a change under this form of ownership. "I will say we were surprised at how strong it was," said Dr. Sneha Kannan, per the Times. Dr. Ashish Jha, who has studied hospital safety, reviewed the findings and found them significant. "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," he said. (More hospitals stories.)

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