Are You Safe At Private-Equity-Owned Hospitals?

Get ready for disappointment if you think you are safe at private-equity-owned hospitals.  Patients at private-equity-owned hospitals are more likely to suffer from hospital-based infections (38% higher) and falls (27% higher).  Worse, patients at private-equity-owned hospitals are paying more for the privilege of increased risks.

Private Equity Is Causing A Health Care Crisis

Researchers associated with Harvard Medical School and the University of Chicago examined over 4.5 million hospitalizations at various U.S. hospitals and published a paper that identified changes in adverse events and patient outcomes after the private-equity acquisition of a hospital.  They highlight significant concerns regarding patient safety in hospitals owned by private equity investors, in contrast to public, university-owned, or charitable organization-owned hospitals.  The results include same-facility risk changes after the hospital was acquired by private equity groups.

The study reveals alarming statistics, with surgical site infections doubling in 51 hospitals under private equity ownership, despite a lower number of surgeries compared to 259 non-private-equity hospitals. Bloodstream infections associated with central line catheters increased by 38% over three years after a private equity acquisition, despite a decline in catheter placements.  Falls also rose by 27% during the same period.  Overall, Medicare patients in private-equity-owned hospitals experienced 25% more dangerous events during their hospital stays.

“Private equity acquisition was associated with increased hospital-acquired adverse events, including falls and central line–associated bloodstream infections, along with a larger but less statistically precise increase in surgical site infections.”

Private-Equity-Owned Hospitals Accept A Higher Patient Risk Profile For Profits

Private equity firms, which secure funding from various sources, including endowments and state pension funds, leverage hospital assets for loans to increase their value before selling within a specified timeframe. This approach, while financially motivated, raises concerns about prioritizing profit over patient well-being.  The researchers note a profit-centric approach to health care delivery, rather than one focused on patient safety.  Colleen Grogan points out that despite being one of the wealthiest countries globally, the funds allocated to health care often benefit private entities and investors rather than addressing health care needs.

This highlights a broader need for improvement across all hospitals, but more specifically ones owned by private equity investors.  Investors lobby politicians for less regulation to maximize profits.  These investors also lobby politicians to limit the punishment available after patients are injured in their facilities, again, to maximize profits.  These lobbying efforts often focus on the frontline workers.  The same frontline workers who the private equity owners have overworked and underpaid.  Staffing shortages are not uncommon at private-equity hospitals.  Preventable medical errors, responsible for approximately 250,000 patient deaths annually, may be exacerbated by these staffing cuts and other efforts to cut costs.

Dr. Song suggests that staffing cuts, often driven by the need to repay loans, contribute to declining quality in health care.  There is no denying that staffing plays a role in declining health care delivery.  The research shows the problems go deeper.  Most U.S. health care is provided in a fee-for-service system where payment is tied to services provided, regardless of errors.  This system may contribute to a cycle of errors, compensation, and subsequent fixes–when errors occur and patients require additional treatment, the private-equity hospital gets paid for those additional services.

These findings heighten concerns about the implications of private equity on health care delivery.  The profit motive not only victimizes patients, but it also victimizes the health care providers who have dedicated their lives to providing quality care.  Many are stuck in a system where they raise concerns about patient safety and are told to do their best–they are forced to endure a system that denies them the additional resources they need, but they do it because they care about their patients.

In the end, both the patient and the health care provider are left to suffer–either from preventable injuries or from being a defendant in a medical negligence lawsuit.  In both circumstances, we are left with the feeling that private equity investors don’t care about either.  They only care about their profits.

About the Author

Joseph D'Aguanno

Guided by the belief that being a highly skilled specialist in a narrow field is better than being ordinary in everything, Joseph “JD” D’Aguanno leads Arizona’s best personal injury law firm in Phoenix, AZ. Having extensive cross-training in pre-litigation negotiations and trial lawyer skills, with decades of experience, JD strives to provide clients with the most valuable legal services a personal injury lawyer can provide. Under his direction, Gage Mathers Law Group is an award-winning personal injury law firm providing aggressive representation to victims of a car accident, medical malpractice, dog bite, motorcycle accident, and other injurious events. Gage Mathers is trusted by thousands of lawyers and clients throughout the country because of their reputation for getting clients the maximum compensation they deserve.

Years of experience: Over 23 years
Bar number: 020421
Location: Phoenix, AZ
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