In a striking indictment of private equity's foothold in healthcare, a recent study out of Harvard Medical School suggests patient safety is slipping at hospitals post-acquisition. The research, featured in a December publication of JAMA, points to a noticeable uptick in serious patient complications at facilities falling under private equity ownership, as reported by the Harvard Gazette.
With over a trillion dollars poured into U.S. healthcare by private equity in the last decade, these findings raise red flags about the often-touted efficiency of for-profit models. After such an acquisition, Medicare patients faced a 25 percent spike in issues like infections or falls, considered preventable and critical barometers of hospital safety. Dr. Zirui Song, associate professor at Harvard and an internal medicine physician at Massachusetts General Hospital, underlined the nature of these findings, “We had previously found that private equity acquisitions led to higher charges, prices, and societal spending,” Song said, “Now, we’re learning that there are also downstream concerns for the clinical quality of care delivered to hospital patients.”, as mentioned by the Harvard Gazette.
The essence of the concern, the research implies, is that the financial imperatives driving private equity could potentially eclipse the primary mission of patient care. Sneha Kannan, a research fellow and physician, echoed the sentiment in her cautionary note that hospital success isn't purely a financial metric but includes lives saved, complication rates, and patient satisfaction among others.
Distinctly differing from other forms of healthcare ownership, private equity typically orchestrates buyouts heavy on debt—an arrangement that saddles the acquired institutions with sizable financial burdens. These fiscal dynamics are frequently criticized for incentivizing cost-cutting measures that can detract from patient care, the study suggests. A comprehensive comparison of Medicare hospitalizations at 51 private equity-acquired hospitals with 259 similar hospitals showed that, despite using 16 percent fewer central lines after the buyout, patients at private equity hospitals still experienced 27 percent more falls and 38 percent more bloodstream infections.
Although a minor decline in-hospital deaths was recorded at hospitals post-private equity takeover, the researchers advise caution in interpretation. The decrease in mortality may be influenced by factors such as younger patient demographics or the transfer of patients out of these hospitals—trends that when tracked over time, show the reduction in deaths fading within a month of discharge.
Song suggests a framework for solutions, addressing the topic earlier this year in JAMA, they proposed policies seeking more stringent regulation and reporting, anticipating a fuller understanding of how these deal structures are reshaping the landscape of healthcare delivery.“Patients and providers, investors and taxpayers, employers and insurers, all have a stake in this,” Song emphasized.
