A new research study has uncovered some horrifying trends in private equity owned hospitals. It exposes a catastrophic spike in mortality among emergency patients. Significant research indicates private equity firms are continually buying up these facilities. As a result, they divert emergency patients to other hospitals 12% of the time more than non-private equity hospitals. This trend raises concerns about the quality of care, with policymakers urged to consider the implications of cost-cutting measures in healthcare.
The study looked at staff levels, wages, and patient mortality in 49 hospitals taken over by private equity. It compared these results to 293 non-private equity control hospitals and found that patients transferred from private equity hospitals were at a higher risk of having a plurality of medical comorbidities. Among these conditions frequently encountered in emergency departments are trauma, respiratory failure, sepsis, myocardial infarction (heart attack), and stroke.
While transfers are increasing, these results show a disturbing pattern. Many more patients are dying in emergency departments that have been taken over by private equity firms. The extensive analysis found an additional 7 out of 10,000 patients die in these facilities. This shocking statistic adds an estimated 700 more deaths in the one million emergency department visits studied.
The new study additionally pointed to drastic cuts in hospital head count and pay, in the wake of private equity takeovers. Salaries in the emergency department at these facilities decreased by an average of 18.2%. The average number of full-time hospital workers per hospital fell by 11.6%. This cut has resulted in decreased staffing levels and reduced resources to the teams that care for patients.
Dr. Zirui Song, one of the study’s authors, stated, “Some patients in emergency departments come in critically ill, requiring all hands on deck to care for them. Trauma, respiratory failure, sepsis, heart attack and stroke are a few examples of such conditions often seen in emergency departments.” He further explained that “sicker patients are transferred out to other hospitals, often because the first hospital lacks the bandwidth, capacity or resources to take care of them.”
The relevance of these findings goes beyond the hospitals’ own wallets. The simple fact is that private equity firms prioritize profit over care quality. This profit-seeking marketing often leads to list price increases that patients have to pay. Martin Kenney, a healthcare expert, remarked on the broader implications of private equity’s influence on healthcare: “Private equity takes over things in the medical field, quality goes down, prices go up.”
These troubling findings have led to urgent calls for increased accountability in the healthcare system. Kenney emphasized that it is key for Congress to act. He says the deal needs to hold private equity firms responsible for their negative effects on the quality of healthcare. He noted, “Congress would have to pass a law saying that a private equity firm is responsible for the activities of the firm in its portfolio.”
The political landscape makes things even more difficult. Yet to varying degrees, both Republican and Democratic members of Congress have billions of dollars committed to self-same private equity firms. This could create even greater conflicts of interest when it comes to regulating industry, which should alarm us all.
Kenney expressed concern over the lack of accountability in the current system: “You don’t sue the private equity firm because the private equity firm is insulated.” He added that while some expenditure cuts may improve operational efficiency in hospitals, others could be detrimental to patient care: “Some cuts in expenditures may improve the efficiency of hospital operations, but other cuts may be harmful to patient care.”