Study Finds Patient Care Quality Declines After Private Equity Firms Acquire Hospitals

Changes in Patient Care Experience After Private Equity Acquisition of US Hospitals | Health Care Quality | JAMA | JAMA Network

Check Who Owns It: Research Shows Patient Care Deteriorates After Private Equity Hospital Takeovers

Patient care quality and satisfaction significantly decline after private equity firms acquire hospitals, according to new research published in JAMA, raising fresh concerns about Wall Street's growing influence in American healthcare.

The study, which examined 73 private equity-acquired hospitals and 293 control hospitals between 2008 and 2019, found that patient satisfaction scores dropped steadily after acquisition, with the decline worsening over time. By the third year after takeover, patient ratings fell by approximately 5 percentage points compared to non-acquired hospitals – a larger decline than seen during the COVID-19 pandemic.

Dr. Ashish Jha, former White House COVID-19 Response Coordinator and current dean of Brown University's School of Public Health, explains that private equity firms' focus on short-term profits often leads to cost-cutting measures that harm patient care.

"Private equity firms look at the end of the day they're in it for one reason one reason only which is that they're trying to make money," says Jha. "One of the easiest ways of reducing costs is reducing your staffing, cut back on nursing staffing. It'll save you money, [but] it can put patients at risk."

The study found that patients at private equity-owned hospitals reported decreased staff responsiveness, and fewer said they would "definitely recommend" these facilities to others. The research also revealed that private equity acquisitions are leading to concerning levels of market concentration – in some metropolitan areas, a single private equity firm owns more than half of certain medical specialties.

"When there's not enough competition, there's not competition for quality, there's not competition for pricing and costs," Jha notes. "What we tend to see in concentrated markets is costs go up, quality goes down."

The findings come amid growing scrutiny of private equity's expanding role in healthcare, with Congressional committees investigating the impact of these acquisitions. While the researchers and experts like Jha acknowledge that not all private equity involvement in healthcare is necessarily harmful, they emphasize the need for stronger oversight and enforcement of existing monopoly laws to protect patient safety and healthcare quality.