What's Happening?
A recent study published in the Annals of Internal Medicine reveals that patient death rates in emergency departments rose by 13% after hospitals were acquired by private equity firms. The research analyzed 1 million emergency department visits by Medicare patients at 49 private equity-owned hospitals from 2009 to 2019, comparing outcomes with over 6 million visits at 293 similar hospitals not acquired by private equity. The study found that staffing levels decreased by an average of 11.6% and salary expenditures in emergency departments and intensive care units declined by 18% and 16%, respectively. Dr. Zirui Song, a co-author and associate professor at Harvard Medical School, noted that reduced staffing in sensitive areas like emergency departments and ICUs can lead to increased mortality.
Why It's Important?
The findings highlight the potential negative impact of private equity ownership on healthcare quality, particularly in emergency settings. As private equity firms often prioritize profit, they may reduce staffing and other operational costs, potentially compromising patient care. This study adds to growing concerns about the influence of private equity in healthcare, which has seen over $1 trillion in investments in recent years. The healthcare sector accounts for 18% of the U.S. GDP, making it a significant target for financial operators. The study's results may prompt policymakers to consider regulations to mitigate the adverse effects of private equity ownership on patient outcomes.
What's Next?
Some states are already taking action to address the impact of private equity on healthcare. Oregon has enacted a law limiting corporate and private equity control over healthcare operations, while Indiana has expanded the attorney general's powers to investigate healthcare transactions. These legislative efforts may serve as models for other states seeking to protect healthcare quality from profit-driven ownership. The study's findings could also influence future healthcare policy discussions at the national level, as stakeholders seek to balance financial interests with patient care standards.
