Study finds that hospitals bought by investment funds increase emergency room patient mortality rates

A research paper published by a research team from Harvard University, the University of Pittsburgh, the University of Chicago, and Beth Israel Deaconess Medical Center reported that when a hospital is acquired by a private equity (PE) fund , the emergency room patient mortality rate increases by approximately 13% compared to similar hospitals. The results of this study, which compared hospital performance over a 10-year period, suggest that medical institutions owned by profit-driven financial organizations experience worse patient outcomes.

Hospital Staffing and Patient Outcomes After Private Equity Acquisition | Annals of Internal Medicine
https://www.acpjournals.org/doi/10.7326/ANNALS-24-03471

Deaths Rose in Emergency Rooms After Hospitals Were Acquired by Private Equity Firms | Harvard Medical School
https://hms.harvard.edu/news/deaths-rose-emergency-rooms-after-hospitals-were-acquired-private-equity-firms

Death rates rose in hospital ERs after private equity firms took over, study finds
https://www.nbcnews.com/news/us-news/death-rates-rose-hospital-ers-private-equity-firms-took-study-finds-rcna233211

Hundreds of hospitals, nursing homes, and thousands of clinics have been acquired by private equity funds in the U.S. The study analyzed Medicare claims data from 2009 to 2019, covering over one million emergency room visits and 121,000 intensive care unit admissions at 49 hospitals acquired by private equity funds and 293 comparison hospitals.

The study found that emergency departments in hospitals acquired by private equity funds experienced an increase of seven deaths per 10,000 visits for patients enrolled in public health insurance for the elderly, a 13% increase from the pre-acquisition baseline.

Specific data on staff reductions included an 18% reduction in emergency department salary expenditures and a 16% reduction in ICU (intensive care unit) expenditures at acquired hospitals. Additionally, the study found that the hospital's overall full-time staffing declined by an average of 11.6% and salary expenditures by 16.6%. The research team stated, 'Staff reductions in areas where face-to-face patient care, such as emergency medicine and intensive care, are central to patient care, directly translate into a decline in the ability to care for patients.'

Additionally, hospitals acquired by PE funds tended to transfer patients to other hospitals more often and to have shorter ICU stays, suggesting that staffing cuts have reduced their ability to treat high-risk patients.

'Private equity funds typically pursue profit-seeking strategies by cutting labor costs, but for elderly and vulnerable patients, this financial strategy can be dangerous and sometimes life-threatening,' said Song Zirui, an associate professor at Harvard Medical School.

On the social news site Hacker News , some comments pointed out that 'hospitals acquired by PE funds are charging up to 17 times the medical fees of hospitals that are not,' 'nursing homes acquired by PE funds are also experiencing higher mortality rates among inmates,' and 'the practice of forcing doctors to resign and hiring nurses and physician assistants in training to cut labor costs may be the reason for the decline in patient recovery rates.'

Another user said, 'The incentives of big corporations are so far removed from the well-being of humanity and the interests of society that it is literally impossible to avoid this situation without strong consumer protections and antitrust regulations.'

In the United States, private equity fund acquisitions in the healthcare sector have already become a problem, and the U.S. and state governments have begun investigating and regulating them. Specifically, they are considering bills aimed at strengthening transparency and oversight of acquisitions, as well as preserving the role of private capital while protecting patients and healthcare workers from harm.