Infections and falls increased in private equity-owned hospitals

Local hospitals might be owned by the university next door, by a non-profit organization, or by a for-profit company. Over the last decade, more and more hospitals have been purchased by private equity firms.

The private equity model involves using investor money—and additional debt—to purchase an asset like a hospital. The firm typically then cuts operating costs, often sells the real estate portion, and attempts to re-sell the entity for a profit after several years.

Previous research from a team led by Dr. Zirui Song from Harvard Medical School found that, on average, private equity acquisitions of hospitals lead to increased costs for society. However, the impact of private equity on the quality of medical care hasn’t been clear.

To help measure this potential impact, Song’s team looked at hospital-acquired conditions. These are health problems acquired during a hospital stay that a person did not have beforehand. They can include infections, blood clots, falls, and other adverse events.

The team looked at Medicare data on hospital-acquired conditions collected between 2009 and 2019. They compared the incidence of such conditions between 51 hospitals acquired by private equity during that period and 259 hospitals not owned by private equity firms (control hospitals). Hospitals in the two groups were matched by year studied, type of ownership, geographical location, and other factors.

The researchers also included individual factors associated with health care outcomes, such as race and ethnicity, in their analyses. Hospitalizations were studied from up to 3 years before to up to 3 years after private equity acquisition. The study, which was funded in part by NIH, was published on December 26, 2023, in JAMA.

The analysis showed that hospitals saw a 25% increase in hospital-acquired conditions after acquisition by private equity firms relative to the control group. This increase was mainly driven by a spike in infections after the placement of a central line (a type of IV inserted near the heart to deliver drugs, fluids, or other substances) and an increase in falls.

Private equity acquisition was associated with a 27% increase in falls. It was also associated with an almost 38% increase in infections after central-line placement. This increase occurred even though the hospitals owned by private equity placed 16% fewer central lines overall.

Overall, deaths decreased by 0.1% in private equity hospitals during the period studied. However, private equity-owned hospitals were more likely to transfer sick patients to other hospitals during their stay. This likely meant that more seriously ill patients were transferred away before their deaths. In addition, after a hospital’s acquisition by private equity, the people admitted were slightly younger and less likely to be socially or economically disadvantaged than patients at control hospitals.

“We had previously found that private equity acquisitions led to higher charges, prices, and societal spending,” Song says. “Now, we’re learning that there are also downstream concerns for the clinical quality of care delivered to hospital patients.”

—by Sharon Reynolds