Jan 4, 2024 - Business

Study shows increased patient risks at private equity-owned hospitals

Animated illustration of a caduceus with the wings flying away, the snakes slithering away, and the stick falling.

Illustration: Brendan Lynch/Axios

Hospital patients are more likely to fall or acquire infections inside of private equity-owned facilities than in peer facilities, according to a study by Harvard Medical School and University of Chicago researchers.

Why it matters: Private equity is coming under more scrutiny as it buys more health care providers, and that could lead to new regulations.

Zoom out: Most research on PE-owned hospitals or physician groups has focused on operational metrics that impact patients indirectly, such as staffing levels.

  • This one, which is based on over 1 million hospitalization records over an 11-year period (2009-2019), is specifically about quality of care.

Details: The researchers examined 51 PE-owned hospitals, matching each to up to eight different "control" hospitals that were picked via metrics like geography, size, and teaching status (a total of 259 "control" hospitals were included).

  • They applied regression models to Medicare Part A claims data, including for three years before and after private equity acquired hospitals.
  • The top finding was a 25.4% increase in hospital-acquired adverse conditions at PE-owned hospitals versus pre-acquisition, with the control hospitals being used to normalize the data, including a 37.7% jump in central line–associated bloodstream infections.
  • Mortality was slightly lower at PE-owned hospitals, although the differential disappeared a month after discharge.
  • Data was presented as averages, although supplemental median data tracked similarly.

What they're saying: "The rates of these adverse conditions have been going down over time, which we obviously all want, but we found a significant difference between the private equity hospitals and the control hospitals," explains Harvard's Zirui Song, who conducted the study alongside Sneha Kannan and Joseph Dov Bruch.

  • The researchers noted that their findings "heighten concerns about the implications of private equity on health care delivery," but that they "do not imply causation."
  • That last part, Kannan says, is because it's impossible to conduct a randomized clinical trial for such data, which would be needed to assert causation.

By the numbers: There are at least 386 U.S. hospitals owned by private equity, representing 9% of the total and 30% of for-profit hospitals, per the PE Stakeholder Project.

Zoom out: A few studies have found that PE ownership of hospitals has no negative impact on care, including this one tied to outcomes on acute conditions like pneumonia and stroke.

  • American Investment Council CEO Drew Maloney tells Axios: "The private equity industry plays an essential role in providing local hospitals with the capital they need to improve patient care, expand access, and drive innovation. This research doesn't reflect private equity's full record of strengthening health care across the country."

The bottom line: Maloney is correct that the Harvard study doesn't tell the full story of how PE ownership impacts hospital patients. But it wasn't intended to do so.

  • It was designed to look specifically at adverse events suffered by patients after being admitted, with a meticulous methodology, and the results are fairly damning.
  • If private equity wants to better control its own future in health care, and help patients, a better reply might be something like: "These findings are distressing, and our job now is to figure out why this happens and stop it from continuing to happen."
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