12/26/23 NY Times: Serious Medical Errors Rose After Private Equity Firms Bought Hospitals
An excerpt:
The study, published in JAMA on Tuesday, found that, in the three years after a private equity fund bought a hospital [51 hospitals in study], adverse events including surgical infections and bed sores rose by 25 percent among Medicare patients when compared with similar hospitals that were not bought by such investors. The researchers reported a nearly 38 percent increase in central line infections, a dangerous kind of infection that medical authorities say should never happen, and a 27 percent increase in falls by patients while staying in the hospital…
Although the researchers found a significant rise in medical errors, they also saw a slight decrease (of nearly 5 percent) in the rate of patients who died during their hospital stay. The researchers believe other changes, like a shift toward healthier patients admitted to the hospitals, could explain that decline. And by 30 days after patients were discharged, there was no significant difference in the death rates between hospitals…
The researchers said the most likely explanation for the increased errors was fewer hospital employees, an effect that has been measured in other studies of private equity.
My take: Private equity (PE) investment is likely to result in a lower quality of care in most circumstances. The primary driver of PE is profits not people. In order for PE to achieve their goals, it necessitates either driving up costs (higher profit margin) or reducing costs/staffing.
Related blog posts:
- Changing Business of Medicine: Private Equity
- Case Study of Private Equity in Physician Practices: Anesthesia in Colorado
- Private Equity in Gastroenterology & More Broadly
- Consolidation and Competition in Health Care
gutsandgrowth 