When private equity (PE) firms take over hospitals, emergency room patients suffer, or so suggests a new study published in the Annals of Internal Medicine. Researchers found that emergency room death rates increased 13% at hospitals acquired by PE firms compared to similar hospitals without such ownership; that translates to an extra 7 deaths per 10,000 visits. The research, conducted by a team from Harvard, the University of Pittsburgh, and the University of Chicago, among others, analyzed data from more than a million Medicare patient visits at 49 PE-owned hospitals between 2009 and 2019. For comparison, more than 6 million emergency visits at 293 hospitals of similar sizes and locations that weren't PE-owned were examined.
Staffing reductions appear to be a driving force behind the results, study co-author Dr. Zirui Song of Harvard Medical School tells NBC News. After a PE acquisition, full-time staff levels dropped by an average of 11.6%, and staffing costs in both emergency and intensive care units also declined sharply. "When human labor is cut to this extent in staffing sensitive areas ... patient harm can plausibly ensue, including mortality," said Song.
Private equity firms typically buy companies by taking on significant debt, then aim to boost profits—often by cutting costs, with employees frequently the first affected. The researchers also noted the data showed the average length of an ICU stay was shortened by 0.2 days at PE-owned hospitals. "Among Medicare patients, who are often older and more vulnerable, this study shows that those financial strategies may lead to potentially dangerous, even deadly consequences," Song said, per Harvard Medical School News. The researchers note it's the first time this patient population has been studied in depth as it relates to PE; previous research has focused on hospital admissions overall, not just those in the ER, they say.
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