Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

Hospitals owned by private equity firms rake in almost 30% more income than hospitals that aren’t, according to new research published this week in JAMA Internal Medicine.

Why it matters: Private equity is gobbling up more and more of the health care industry. Investors are buying up physicians’ practices, hospitals and the firms that negotiate prices with insurers.

  • Their ownership of ambulance operations and free-standing emergency rooms — two big sources of unexpected medical bills — has sparked plenty of patient complaints and political controversy, but that hasn’t affected investors’ appetite for health care providers.
  • It’s no big surprise that these providers’ profit margins would spike once they’re taken over by a private equity firm. That’s the whole point. But the JAMA study helps illuminate how big a difference Wall Street ownership makes.

By the numbers: Three years after their acquisition, private equity-owned hospitals were bringing in about $2.3 million per year more in income than a control group of hospitals that weren’t acquired, according to the study.

  • Their total charges per inpatient day were about $400 higher, on average, and they saw a bigger gap between their costs and the prices they charged.

Between the lines: Hospitals’ charges often don’t reflect the rates they actually get paid by insurance plans, but it’s safe to assume that higher charges typically translate into higher payments. And uninsured patients often have to pay the entire sticker price.

Hospitals recorded a sicker overall patient population after they were acquired, which could suggest that they’re upcoding in search of higher reimbursements, the study’s authors wrote.

  • Acquired hospitals saw some improvement on certain quality metrics, though the authors say that may be a product of “better adherence to compliance standards or efforts to maximize opportunities for quality bonuses under pay-for-performance contracts.”

The bottom line: This is just one slice of the market forces driving up the cost of care. Hospitals are consolidating and snapping up doctors’ practices even when they’re not under private equity’s umbrella, and private equity is buying up far more than just hospitals.

Go deeper

Nov 5, 2020 - Health

Health care still loves a divided Congress

Data: Money.net; Chart: Andrew Witherspoon/Axios

Health care stocks skyrocketed after Tuesday's election results indicated Republicans likely will maintain control of the Senate, all but assuring continued gridlock in both chambers of Congress.

The big picture: A Republican Senate means "the public option and direct government negotiation on drug prices are dead for at least the next two years," Spencer Perlman, an analyst at Veda Partners, wrote to investors Wednesday.

Dion Rabouin, author of Markets
Nov 5, 2020 - Economy & Business

The no-wave rally begins

Data: FactSet; Chart: Axios Visuals

U.S. stocks which analysts and strategists insisted had been rising based on the anticipation of a blue wave Democratic victory in the House, Senate and White House — had their best day in nearly seven months as that possibility looked to be wiped off the table.

  • While some races have not yet been called, Democrat Joe Biden looks poised to win in his election against President Trump, but so do many incumbent Republicans senators.

What they're saying: Some attributed the stock market's surge — the Nasdaq rose 3.9% and the S&P 500 gained 2.2% — to the market's happiness with a potential divided government and discounted prospects of tax increases. However, there were other explanations...

Mike Allen, author of AM
6 hours ago - Politics & Policy

Biden adviser Cedric Richmond sees first-term progress on reparations

Illustration: "Axios on HBO"

White House senior adviser Cedric Richmond told "Axios on HBO" that it's "doable" for President Biden to make first-term progress on breaking down barriers for people of color, while Congress studies reparations for slavery.

Why it matters: Biden said on the campaign trail that he supports creation of a commission to study and develop proposals for reparations — direct payments for African-Americans.