A recent study has revealed a shocking truth about the impact of private equity on healthcare facilities, specifically hospitals. The findings are a wake-up call for anyone who values quality healthcare and patient well-being.
The study, published in Annals of Internal Medicine, highlights a disturbing trend: private equity acquisitions of hospitals have led to a rise in deaths among emergency department patients receiving Medicare. This is just the latest in a series of studies that paint a concerning picture of the private equity industry's influence on healthcare outcomes.
Martin Kenney, a distinguished professor at the University of California, Davis, and author of Private Equity and the Demise of the Local, sums it up perfectly: "Private equity takes over things in the medical field, quality goes down, prices go up." This statement is supported by multiple studies, each pointing to the same troubling conclusion.
Researchers have found that private equity acquisition not only affects hospitals but also nursing homes, leading to increased mortality rates. Additionally, there's evidence of higher post-operative complications and a rise in medical conditions acquired within hospitals, such as bloodstream infections and injuries from falls. These findings are a stark reminder of the potential consequences when profit takes precedence over patient care.
The Department of Health and Human Services even condemned private equity's role in worsening patient outcomes during the Biden administration. The latest study compared private equity-acquired hospitals with non-private equity control hospitals, revealing some alarming statistics. Private equity hospitals had smaller staff numbers, lower salaries, and, most worryingly, seven more deaths per 10,000 patients in their emergency departments. That's a significant increase, resulting in approximately 700 excess deaths among the million emergency department visits studied.
All patients included in the study were Medicare recipients, highlighting the vulnerability of this specific population. Associate Professor Zirui Song from Harvard Medical School, one of the study's authors, emphasizes the importance of adequate staffing in emergency departments, especially for Medicare patients. These patients often require specialized care due to their age, multiple health conditions, and increased vulnerability compared to commercially insured patients.
Private equity-owned health facilities are known for their cost-cutting measures, including rejecting higher-risk patients. This practice extends to emergency departments, where private equity-owned hospitals transfer 12% more emergency patients to other facilities. These transferred patients are more likely to have multiple conditions, indicating a lack of resources or capacity to handle complex cases.
Despite the increase in patient transfers, the study found that more patients were still dying in private equity-owned hospitals. Professor Song describes this as "concerning," suggesting that policymakers should carefully consider the implications of cost-cutting measures in hospitals.
"Some cuts in expenditures may improve the efficiency of hospital operations, but other cuts may be harmful to patient care," Song warns. Unfortunately, holding private equity firms accountable for declines in patient care is a challenging task, according to Professor Kenney.
The current legal system makes it difficult to sue private equity firms for the actions of their portfolio health companies. Plaintiffs must meet a high burden of proof to demonstrate direct involvement in day-to-day operations, even when the firm profits from harmful cost-cutting measures. Instead, lawsuits often target the hospitals or health companies themselves, leaving patients harmed by these practices with little recourse.
To bring about change, Congress would need to pass a law holding private equity firms responsible for the actions of their portfolio companies. However, Professor Kenney is skeptical about the likelihood of such legislation, given the influence of private equity firms on Congress and the executive branch. The conflict of interest is clear, with both Republican and Democratic members of Congress, as well as the Secretary of the Treasury, having significant investments in private equity firms.
In conclusion, the study's findings are a stark reminder of the potential consequences when profit takes precedence over patient care. While consumers may have some choice in other industries, emergency healthcare is a critical service where patients often have no alternative. The question remains: how can we ensure that private equity firms prioritize patient well-being and quality healthcare over profit?
