The rate of serious medical complications increased at hospitals after they were purchased by private equity investment firms, according to a major study of the effects of such acquisitions on patient care in recent years.
The study, 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 sores, increased by 25 percent among Medicare patients compared to similar hospitals that were not purchased by said investors. . Researchers reported a nearly 38 percent increase in central line infections, a type of dangerous infection that medical authorities say should never occur, and a 27 percent increase in patient falls while They remain 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, who was the lead author of the paper. “I will say we were surprised by how strong he was.”
Although the researchers found a significant increase in medical errors, they also observed a slight decrease (of almost 5 percent) in the rate of patients who died during their hospital stay. Researchers believe other changes, such as a shift toward healthier patients admitted to hospitals, could explain that decline. And 30 days after patients were discharged, there were no significant differences in mortality rates between hospitals.
Other researchers who reviewed the study said that while it did not provide a complete picture of the effects of private equity, it did raise important questions about the quality of care at hospitals that had been taken over by private equity owners.
“This is important because it's the first piece of data that I think suggests pretty strongly that there's a quality problem when private equity takes over,” said Dr. Ashish Jha, dean of the Brown University School of Public Health. , who has also extensively studied hospital safety.
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, doctors' offices and home health companies. Companies raise money from institutional investors and individuals to form investment funds, often buying hospitals and other entities with high levels of debt, with an eye to reselling them within a few years. A recent independent study suggested that companies were Consolidate physician groups in certain local markets.which could lead to higher prices.
So far, these companies own a small proportion of US hospitals, although the numbers are difficult to measure because the transactions are not always public.
Various media reports have shown that some of the acquired hospitals have been forced to close due to financial difficultiesand some have fallen regulatory scrutiny due to quality problems. But these examples are not necessarily typical.
“The private equity industry plays an essential role in providing local hospitals with the capital they need to improve patient care, expand access and drive innovation,” said Drew Maloney, executive director of the American Investment Council, an industry trade group. “This research does not reflect the full record of private capital in strengthening health care across the country.”
The industry has come under scrutiny recently. This month the Senate Budget Committee bipartisan investigation began on the private property of hospitals. And bills from several Democrats in Congress have pushed for more public reporting on private equity deals in the healthcare sector and for broader reforms to the ways companies can acquire companies and get benefits.
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 such changes may result in more dangerous conditions for patients. The researchers, who also include Dr. Zirui Song of Harvard and Joseph Dov Bruch of the University of Chicago, received funding from Arnold Ventures, a group that supports a wide range of health care and research. has been critical of the private equity industry.
Former investigation found that patients were less 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 reflected care in a hospital rather than patient deaths, which are more likely to be influenced by patients' health status. who enter the hospital.
The researchers examined a variety of errors that Medicare tracks and that Medicare encourages hospitals to minimize. Hospitals with high levels of some of these problems (such as central line infections) must pay financial penalties to the government. Although not all errors occurred frequently enough to be measured accurately, and complications occurred rarely overall, all eight individual measures studied in the paper were worse in hospitals acquired by private equity funds.
Overall, rates of these complications have been declining for about 15 years, as hospitals have worked to reduce them and best practices to avoid them have become widespread.
“These are preventable adverse events that everyone thinks should not happen in hospitals,” said Dr. David Blumenthal, former president of the Commonwealth Fund, a nonprofit health care research group, which reviewed the study.
Some private equity owners may be overly eager to cut costs, leading to a decline in the quality of care, he said. “It's about investment style,” she said. “It's about the aggressiveness and the short-term gains and returns on investment that you're looking for.” In cases where this strategy is not followed, private capital can be positive, Dr. Blumenthal added: “It provides capital. It brings innovation.”
The researchers said the most likely explanation for the increase in errors was that there were fewer hospital employees, an effect that has been measured in other private equity studies. “Staff reductions after the acquisition could explain all of these findings,” Dr. Song said.
But this article did not directly measure staffing levels at the hospitals it examined.
Dr. Song has advocated for greater government oversight of private equity companies in the healthcare sector. But several academics who have studied the companies said that while the new document raises serious concerns, it still leaves some important questions unanswered for policymakers.
“This should make us lean forward and pay attention to what's happening,” said Zack Cooper, an economics professor at Yale who has examined the industry. “This should not lead us to introduce wholesale policies yet.”
Vivian Ho, an economics professor at Rice, co-authored a paper which documented staff reductions after companies bought hospitals, including small cuts in nursing. Professor Ho noted that it is difficult to be sure whether the reductions were the result of the change in leadership or the ownership of a private equity firm specifically, but she said the results were alarming enough that she was eager to see more evidence.
“I'm willing to believe it's due to personnel issues,” she said. “You just combine that with anecdotal reports of what's happening at some of these hospitals, and it's a consistent story.”
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