Private Equity Acquisition Tied to More Hospital-Acquired Conditions

January 04, 2024 - Private equity acquisition of hospitals was associated with an increase in hospital-acquired conditions, including falls and central line-associated bloodstream infections, a study published in JAMA found.

As private equity firms increasingly acquire hospitals and physician practices, policymakers and other healthcare stakeholders have expressed concerns. These acquisitions may negatively impact the quality of patient care, as private equity firms are typically interested in generating financial returns on investment as fast as they can.

Researchers used Medicare Part A claims data from 2009 to 2019 to evaluate the association between private equity acquisitions and conditions acquired during hospitalization. They looked at 12 hospital-acquired conditions, including blood incompatibility, falls and trauma, catheter-associated urinary tract infections, central line-associated infections, surgical site infections, and deep vein thrombosis.

In addition to hospital-acquired conditions, researchers assessed the association between acquisition and mortality, length of stay, and discharge disposition.

The final sample included 662,095 hospitalizations at 51 private equity hospitals and 4.1 million hospitalizations at the 259 matched control hospitals. Hospital-acquired adverse events occurred during 10,091 hospitalizations.

The unadjusted number of hospital-acquired conditions per 10,000 hospitalizations increased among patients receiving care at private equity hospitals compared to the control hospitals. An adjusted analysis showed a 25.4 percent increase in hospital-acquired conditions per 10,000 hospitalizations at private equity hospitals.

This increase was driven by 1.9 additional falls per 10,000 hospitalizations—a 27.3 percent increase—and 1.5 additional central line-associated infections per 10,000 hospitalizations, or a 37.7 percent increase.

Unadjusted surgical site infections grew from 10.8 to 21.6 per 10,000 hospitalizations at private equity hospitals and decreased from 17.5 to 12.6 per 10,000 hospitalizations at control hospitals.

Despite the increases in the corresponding hospital-acquired conditions, private equity hospitals placed fewer central lines and performed fewer operations that qualified for the surgical site infection measure.

In-hospital mortality decreased by 0.3 percentage points at private equity hospitals compared to 0.2 percentage points at the control hospitals. There was no significant change in mortality 30 days after hospital discharge.

Medicare beneficiaries receiving care at private equity hospitals saw a 1 percent reduction in discharges compared to those treated at the control hospitals. Patients coded with sepsis diagnosis-related groups (DRGs) at hospital admission saw a 4.1 percent decrease in discharges.

Meanwhile, transfers to other acute care hospitals increased by 12.2 percent at private equity hospitals compared to control hospitals. This increase was the most significant among patients with sepsis, who saw a 36.2 percent increase in transfers from private equity hospitals.

A possible explanation for the increase in hospital-acquired conditions following private equity acquisition is the staffing changes that tend to occur after acquisitions. Often, private equity firms reduce staffing and change the clinician labor mix, which can increase the mortality risk and result in adverse events.

The study findings raise additional concerns about the implications of private equity on care delivery and highlight the need for increased oversight of private equity acquisitions.