The rate of serious medical complications rose at hospitals after they were bought by private equity firms, according to a major study of the effects of such acquisitions on patient care in recent years.
The study, published Tuesday in JAMA, found that in the three years after a private equity fund purchased a hospital, adverse events, including surgical infections and pressure sores, increased by 25 percent. among Medicare patients compared to similar hospitals that were 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 patient falls during their hospital stay.
“We weren’t 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 article. “I will say we were surprised at how strong it was.”
Although the researchers found a significant increase in medical errors, they also saw a slight decrease (by almost 5%) in the rate of patients who died during their hospital stay. Researchers believe other changes, such as a shift toward healthier patients being admitted to hospitals, could explain this decline. And 30 days after patients were discharged, there was no significant difference 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 raised important questions about the quality of care at hospitals that had been taken over by owners. private equity.
“It’s a big deal because it’s the first piece of data that I think suggests pretty strongly that there is a quality problem when private equity takes over,” said Dr. Ashish Jha, dean from the Brown University School of Public Health, who has also studied hospital security extensively.
Over the past two decades, private equity firms have become major players in the health care industry, buying not only hospitals but also a growing number of nursing homes, doctor’s offices and care companies home. Companies pool money from institutional and individual investors to form investment funds, often buying hospitals and other entities at high debt levels, with the goal of selling them in a few years. A separate recent study suggested that companies were consolidating doctor groups in some local markets, which could lead to higher prices.
So far, these companies own a small share of hospitals in the United States, although the numbers are difficult to measure because the transactions are not always public.
Several media outlets have shown that some of the acquired hospitals were forced to close due to financial difficultiesand some fell under regulatory control for quality problems. But such examples are not necessarily typical.
“The private equity industry plays a critical role in providing local hospitals with the capital they need to improve patient care, expand access and drive innovation,” said Drew Maloney, chief executive officer of the American Investment Council, an industry trade group. “This research does not reflect private equity’s complete record of strengthening health care across the country.”
The industry has recently come under scrutiny. This month, the Senate Budget Committee began a bipartisan investigation in private participations in hospitals. And bills from several Democrats in Congress have pushed for greater public disclosure of health care private equity deals and broader reforms on how companies can acquire businesses and make a profit .
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 these changes could lead to 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 research and was critical of the private equity sector.
Previous research found that patients were less likely to die after visiting a privately funded hospital. But the researchers said they wanted to focus their study on specific measures such as medical errors that more directly reflected the care provided in a hospital rather than patient deaths, which are more likely to be influenced by the condition health of patients entering the hospital.
The researchers examined a series 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 often enough to be measured accurately and complications occurred rarely overall, all eight individual measures studied in the article became worse at hospitals purchased by fund-raising funds. capital investment.
Rates of these complications have generally been declining for about 15 years, as hospitals work to reduce them and best practices for avoiding them become more widespread.
“These are preventable adverse events that everyone agrees should not be happening in hospitals,” said Dr. David Blumenthal, former president of the Commonwealth Fund, a health care research group in nonprofit, which reviewed the study.
Some private investors might be too eager to cut costs, leading to a decline in the quality of care, he said. “It’s a question of investment style,” he said. “It’s about the aggressiveness, profits and short-term returns on investment that are sought.” In cases where they do not pursue this strategy, private equity can be positive, Dr. Blumenthal added: “It brings capital. This brings innovation.
The researchers said the most likely explanation for the increase in errors was fewer hospital staff, 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 in the hospitals examined.
Dr. Song advocated more government oversight private equity firms in the healthcare sector. But several researchers who have studied these companies said that while the new paper raises serious concerns, it still leaves some important questions unanswered for policymakers.
“This should make us lean forward and pay attention to what’s going on,” said Zack Cooper, a professor of public health and economics at Yale who has studied the industry. “This should not yet lead us to introduce wholesale policies.”
Vivian Ho, an economics professor at Rice, was co-author of a paper which documented staff reductions after companies purchased hospitals, including slight reductions in nursing care. Professor Ho noted that it is difficult to know for sure whether the reductions were the result of a change in management or the ownership of a particular private equity firm, but she said the results were sufficiently alarming so she can’t wait to see more evidence.
“I’m willing to believe it’s because of staffing issues,” she said. “Just combine that with the anecdotal reports of what’s happening in some of these hospitals, and it’s a consistent story.”
