By Gretchen Morgenson — NBC News
Patients admitted to privately owned hospitals suffer more surgical and bloodstream infections and also fall more frequently, a new study by academics at Harvard University and the University of Chicago has revealed.
The research, published Tuesday in the Journal of the American Medical Association, comes after previous studies showed that patients at privately held clinics pay higher costs, suffer the consequences of staff reductions and, in the case of nursing homes, have higher death rates.
The new study was conducted by Drs. Sneha Kannan and Zirui Song, both of Harvard, and Joseph Dov Bruch of the University of Chicago. The report was based on the health charts of patients in privately funded hospitals, an area in which research has been scarce.
These are investor-owned hospitals, as opposed to those that are public or funded by universities or charities.
According to the new findings, private equity firms have bought more than 200 hospitals. In addition, an estimated 40% of hospital emergency departments across the U.S. are run by companies that provide staff and are also privately funded.
Research that had already been published on the topic of privately held hospitals "focused heavily on economic gains, staffing, as well as some measures of quality in processes," Song said in an interview with NBC News. "Our goal was to examine changes in more significant factors such as the quality of health care in these health centers after they were sold," he said. Explained.
An empty hospital room. Thomas Northcut/Getty Images file
Private equity firms are sophisticated investors who buy companies, typically borrow heavily to pay for acquisitions, hoping to sell them in a few years and make a profit. In the last decade, these companies have invested $1 trillion in healthcare entities, seeing huge financial benefits.
Because debt adds a financial burden to acquired companies, their owners often cut costs by laying off workers. They also try to generate more revenue by raising prices for customers. Some hospitals owned by privately held companies sell off the land under their buildings: these operations enrich their owners, who receive the money generated by the sales, but burden the facilities with higher rents.
Preventable Infections and Accidents
Song and his colleagues compared the Medicare bills of patients at 51 hospitals owned by privately held companies with data from 259 health centers, of similar size and location, that were not owned by those companies.
To compare health care before and after acquisition, the academics studied a period beginning three years before hospitals were acquired and three years after.
The acquisitions of the 51 hospitals took place between 2010 and 2017. The study did not identify the health centers whose results it recorded, or the private equity firms that owned them.
According to the study, after hospitals were acquired by private equity firms, patients at these centers experienced an average 25.4% increase in acquired problems such as infections and falls, compared to those seen at other hospitals in the same time period.
Patients at privately owned facilities experienced a 27% increase in falls and a doubling of surgical infections, despite an 8% decrease in surgical case volume.
Patients at privately funded hospitals who participated in the study also experienced an average 38% increase in central line infections, which is when germs enter the bloodstream through a tube placed in a vein in the neck, chest or groin. This increase, according to the researchers, occurred despite the fact that these centers had operated on 16% fewer central lines in patients.
Hospital-acquired conditions, such as infections or falls, "are considered preventable based on guidelines from the Centers for Medicare & Medicaid Services." Medicare reimbursements to hospitals decrease when facilities have a high number of hospital-acquired infections.
Congress gets involved
The study comes amid increasing scrutiny of ownership of healthcare entities by private equity firms. Earlier this month, two senators announced a bipartisan investigation into the impact of these companies on the nation's healthcare system.
The investigation, initiated by Sen. Chuck Grassley, R-Iowa, and Sheldon Whitehouse, D-Rhode Island, focuses on Lifepoint Health, a hospital chain owned by Apollo Global Management, and Prospect Medical Holdings, a health center operator until recently owned by Leonard Green & Partners, a Los Angeles private equity firm.
The senators requested information from the companies to assess the benefits they have generated through their complex financial arrangements, and whether the operations have harmed patients and doctors.
In September, the Federal Trade Commission (FTC) sued U.S. Anesthesia Partners Inc., one of the nation's leading anesthesia staffing firms, and the private equity company that backed it, Welsh, Carson, Anderson & Stowe.
The FTC accused them of planning for a decade to buy anesthesia practices in Texas, monopolize the market, raise prices for patients, and generate profits. Both deny the allegations and oppose the lawsuit.
Previous studies have detected adverse effects when venture capital owns a healthcare company. A 2021 study by the American Antitrust Institute and Petris Center at the University of California, Berkeley School of Public Health concluded that "the private equity business model is fundamentally incompatible with robust healthcare serving patients."
The results of the research published Tuesday in JAMA "raise concerns about the implications of private capital in health care delivery," the authors concluded.
Song told NBC News that he and his colleagues continue to study the impact of private equity on health care. The research, he said, reflects "the actual clinical quality of care on the ground."
He added: "This type of outcome could change the narrative around the impact of private equity on quality of care and patient outcomes."