Private equity firms' ownership of hospitals has been linked to a disturbing trend: an increase in emergency patient deaths, according to a recent study published in Annals of Internal Medicine. This isn't the first time research has uncovered the negative impact of private equity on healthcare. The study highlights a concerning pattern: when private equity firms take control, patient outcomes suffer, and sometimes tragically, lives are lost.
Martin Kenney, a distinguished professor at the University of California, Davis, explains, "Private equity firms in the medical field lead to a decline in quality and an increase in prices." The study's findings are alarming, showing that private equity ownership is associated with higher death rates in emergency departments, nursing homes, and post-operative complications. The Department of Health and Human Services has even condemned private equity's role in worsening patient outcomes.
The research compared 49 private equity-owned hospitals with 293 non-private equity hospitals, revealing stark differences. Private equity hospitals had fewer staff members and lower wages, resulting in seven more deaths per 10,000 patients in their emergency departments. This translates to approximately 700 excess deaths among the million emergency department visits studied, all of which involved Medicare recipients.
Zirui Song, an associate professor at Harvard Medical School and a study author, emphasizes the critical nature of emergency department staffing. He notes that critically ill patients require immediate attention, and reducing staff can be detrimental. Medicare patients, on average, are older, have more health conditions, and are more vulnerable, making them a particularly sensitive group.
The study also found that private equity hospitals transfer 12% more emergency patients to other hospitals, often due to capacity issues. These transferred patients are more likely to have multiple conditions, raising concerns about the overall quality of care and patient outcomes.
Despite these alarming findings, holding private equity firms accountable for declining patient care remains challenging. Policy changes are unlikely, as plaintiffs face significant hurdles in suing private equity firms for the actions of their portfolio health companies. Kenney highlights the current legal landscape, where private equity firms are insulated, making it difficult to hold them directly responsible.
The situation is further complicated by the financial interests of political figures. Both Republican and Democratic members of Congress have substantial investments in private equity firms, and the Secretary of Treasury, Scott Bessent, has connections to the industry. This creates a complex web of influence that may hinder meaningful change.
In conclusion, the study's findings underscore the urgent need for reform in the healthcare industry. Private equity firms' influence over hospitals must be addressed to ensure patient safety and improve healthcare outcomes. The public's lack of choice in emergency room options adds to the urgency, making it crucial to hold these firms accountable for their actions.
