Private Equity Acquisition of Hospitals Worsens Patient Care

Patient-reported care experiences significantly worsened after private equity acquisition of hospitals in the United States, according to study results recently published in JAMA. These findings suggest that the approach used by some private equity firms may not support efforts to improve patient care.

Private equity involvement in health care – particularly in hospital acquisitions – has substantially grown in recent years. Private equity firms typically aim to maximize returns on investment, often through cost-cutting measures and operational restructuring. Although this approach is typically effective at increasing net profit, it has raised concerns about its effect on patient outcomes.

To evaluate whether private equity acquisition of hospitals is associated with changes in patient care, investigators conducted a difference-in-differences analysis of patient-reported care experience measures from 3 years prior to and 3 years following private equity acquisition of US hospitals. The primary outcomes of interest were 2 measures of patient-reported care experience from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey: overall hospital rating and willingness to recommend the hospital. Secondary outcomes of interest included changes in HCAHPS measures of hospital environment, communication, and clinical processes.

The investigators identified 73 hospitals that were acquired by private equity firms between 2010 and 2017 and 293 matched control hospitals. The hospitals were matched based on size, ownership type, teaching hospital status, metropolitan vs non-metropolitan location, geographic region, safety-net status, and year.

Private equity acquisition was associated with a decrease in patient-reported top-box hospital ratings during the postacquisition period vs the preacquisition period (difference-in-differences estimate, -2.4%; 95% CI, -3.9% to -0.9%). Further, the difference in hospital ratings between private equity-acquired hospitals and matched control hospitals increased with each following private equity acquisition, as the investigators observed the largest difference between the 2 groups at postacquisition year 3 (difference-in-differences estimate, -5.2%; 95% CI, -8.8% to -1.5%).

Similarly, the percentage of patients willing to recommend the hospital decreased from 66.9% during the preacquisition period to 65.5% during postacquisition (difference-in-differences estimate, -2.1%; 95% CI, -3.6% to -0.7%). Again, the difference in hospital ratings between private equity-acquired hospitals and matched control hospitals became more substantial with each following acquisition, with the largest difference observed at postacquisition year 3 (difference-in-differences estimate, -4.4%; 95% CI, -8.0% to -0.70%).

The investigators also found that private equity acquisition was associated with a decrease in patient-reported staff responsiveness and the percentage of patients reporting that their doctors communicated well.

Overall, these findings were consistent in sensitivity analyses.

“In this national study, global measures of patient care experience worsened after private equity acquisition of US hospitals,” the study authors concluded. “Improving patient-centered care is a major policy priority, and these findings raise concerns about the implications of private equity acquisitions on patient care experience at US hospitals.”

Study limitations include potential nonresponse bias from the HCAHPS survey data, a lack of data beyond 2019, and an inability to control for factors that may have led to acquisition.

Disclosure: One study author declared affiliations with biotech, pharmaceutical, and/or device companies. Please see the original reference for a full list of author disclosures.

This article originally appeared on Sleep Wake Advisor