The rate of serious medical complications has increased at hospitals after being bought by private equity investment firms, according to a major study of the effects of such acquisitions on patient care in recent years.
The studying, published in JAMA on Tuesday, found that, in the three years after a private equity fund bought a hospital, adverse events including surgical infections and bed sores increased by 25 percent among patients of Medicare compared to similar hospitals not purchased by such investors. Researchers reported a nearly 38 percent increase in central line infections, a dangerous type of infection that medical authorities say should never occur, and a 27 percent increase in patients falling during the stay. in the hospital.
“We were not surprised that there was a signal,” said Dr. Sneha Kannan, a health care researcher and physician in the division of pulmonary and critical care at Massachusetts General Hospital, is the paper’s lead author. “I will say we were surprised at how strong it was.”
Although the researchers found a significant increase in medical errors, they also found a slight decrease (of about 5 percent) in the rate of patients who died during their hospital stay. The researchers believe that other changes, such as a shift toward healthier patients being admitted to hospitals, may explain that decline. And within 30 days after patients were discharged, there was no significant difference in death rates between hospitals.
Other researchers who reviewed the study said that while it does not provide a complete picture of the effects of private equity, it does raise important questions about the quality of care in hospitals taken over by the owners. private equity.
“This is a big deal because it’s the first piece of data that I think strongly suggests that there is a quality problem when private equity takes over,” said Dr. Ashish Jha, the dean of the Brown University School of Public Health, has also studied hospital safety extensively.
Over the past two decades, private equity firms have become major players in health care, buying not only hospitals but also a growing number of nursing homes, physician practices and health care companies in home Companies pool money from institutional investors and individuals to form investment funds, often buying hospitals and other entities through high levels of debt, with the goal of refinancing. sell them in a few years. A separate recent study suggested that companies are consolidating physician groups in some local markets, possibly leading to higher prices.
Today, these companies own a small portion of hospitals in the United States, though numbers are difficult to measure because the transactions are not always public.
Some media reports indicated that some of the acquired hospitals were forced closed due to financial distressand some went under regulatory review for quality problems. But such examples are not necessarily common.
“The private equity industry plays an important role in providing local hospitals with the capital they need to improve patient care, expand access and drive innovation,” said Drew Maloney, chief executive. of the American Investment Council, a trade group for the industry. “This research does not reflect the full record of private equity strengthening health care across the country.”
The industry has recently come under scrutiny. This month the Senate Budget Committee started a bipartisan investigation to private equity owned hospitals. And bills from some Democrats in Congress have pushed for more public reporting of private equity deals in health care, and for broader reforms to the ways that companies can acquire companies. and earn income.
Several studies have examined the financial effects of private equity firms on hospitals. The new paper, which examines 51 hospitals between 2009 and 2019, provides new evidence that those changes may result in more dangerous conditions for patients. The researchers, which also include Dr. Zirui Song from Harvard and Joseph Dov Bruch from the University of Chicago, received funding from Arnold Ventures, a group that supports a wide range of health care research and became critical of the private equity industry.
Previously research found that patients were more likely to die after visiting a private equity-backed hospital. But the researchers said they wanted to focus their study on specific measures such as medical errors that more directly reflect care in a hospital rather than patient deaths, which are more likely to be influenced by hospital status. health of patients entering the hospital.
The researchers analyzed a range of errors that Medicare tracks and that Medicare encourages hospitals to reduce. Hospitals with high rates of some of these problems — such as central line infections — must pay financial penalties to the government. Although not all errors occurred often enough to be measured with precision, and complications rarely occurred overall, all eight individual measures studied in the paper worsened in hospitals that purchased the private equity funds.
The rates of these complications have generally declined for about 15 years, as hospitals have worked to reduce them and as best practices in their prevention have become more prevalent.
“These are preventable adverse events that everyone thinks should not happen in hospitals,” said Dr. David Blumenthal, the former president of the Commonwealth Fund, a nonprofit health care research group, reviewed the study.
Some private equity owners may be too eager to cut costs, leading to a decline in the quality of care, he said. “It’s about investment style,” he said. “It’s about being aggressive and looking for short-time-frame profits and return on investment.” In cases where they do not take this approach, private equity can be positive, added Dr. Blumenthal: “It brings capital. It makes a difference.”
The researchers said the most likely explanation for the increased errors is fewer hospital employees, an effect measured in other private equity studies. “Staffing reductions after the takeover could explain all of these findings,” said Dr. Song.
But this paper did not directly measure staffing levels at the hospitals it examined.
Dr. Song has advocated more government oversight of private equity firms in health care. But some scholars who have studied the companies said that while the new paper raises serious concerns, it still leaves some important questions unanswered for policymakers.
“It should make us lean forward and pay attention to what’s going on,” said Zack Cooper, a professor of economics at Yale, who has observed the industry. “This should not yet be a reason for us to introduce wholesale policies.”
Vivian Ho, a professor of economics at Rice, is a co-author on a paper that documented staff reductions after companies bought hospitals, including small reductions in nursing. Professor Ho noted that it was difficult to ascertain whether the cuts were the result of a change in leadership, or specifically ownership by a private equity firm, but said the results were alarming enough that he was eager to see more evidence.
“I’m willing to believe it’s because of staffing issues,” he said. “You just combine that with the anecdotal reports of what’s happening in some of these hospitals, and it’s a consistent story.”
