Health policy experts at Beth Israel Deaconess Medical Center (BIDMC) recently published a paper in JAMA revealing the negative impact of private equity (PE) acquisition on patient care experience in US hospitals. The study, led by Rishi Wadhera, MD, MPP, and Anjali Bhatla, MD, showed that patient care experience deteriorated after hospitals were acquired by private equity firms, along with patient-reported staff responsiveness.
The researchers found that patient care continued to decline at PE-acquired hospitals with each passing year following the acquisition compared to non-acquired hospitals. This suggests that profit-driven changes implemented by private equity may have long-term detrimental effects on patient care.
According to Wadhera, patients’ perspectives are crucial in assessing the quality of care provided by hospitals. The study’s findings raise concerns about the impact of PE acquisitions on patient care, especially considering the increasing trend of private equity firms acquiring healthcare facilities in recent years.
In their analysis, the researchers identified 73 US hospitals that were newly acquired by private equity firms between 2008 and 2019, comparing them to a control group of 293 non-acquired hospitals. They evaluated various aspects of patient care experience, including overall hospital rating, willingness to recommend the hospital, staff responsiveness, doctor and nurse communication, and hospital environment.
The data revealed a significant decline in global measures of patient care experience and staff responsiveness following PE acquisition of hospitals. Bhatla emphasized that poor patient experiences are associated with slower recovery, medication nonadherence, and increased healthcare utilization.
The study underscores the need for greater transparency, monitoring, and regulatory oversight as private equity’s presence in the healthcare sector continues to grow. In 2021 alone, PE investors spent over $200 billion on healthcare acquisitions, totaling $1 trillion over the past decade. Despite this significant investment, there is limited research on the impact of private equity acquisitions on patient care experience.
Previous research by Wadhera highlighted the rise of private equity firms acquiring outpatient cardiology practices in the US. The study revealed that PE firms tended to acquire cardiology practices in affluent communities, potentially diverting resources from underserved areas. Moreover, the frequent turnover of PE-acquired cardiology practices suggests a focus on short-term profits rather than long-term quality of care.
The researchers call for further investigation into the consequences of private equity acquisitions on patient care and advocate for measures to protect patients from potential harm. The study, published in JAMA, provides valuable insights into the impact of private equity on the healthcare system and emphasizes the importance of prioritizing patient well-being in healthcare investments.
