Private equity hospitals have fewer staff in emergency rooms, and more deaths, study finds

Hospitals that are acquired by private equity firms have seen higher death rates in their emergency departments, researchers say.

Hospitals experienced increased mortality in the emergency departments after being acquired by private equity companies, compared to hospitals that aren’t owned by private equity firms. Researchers at Harvard Medical School, the University of Pittsburgh and the University of Chicago collaborated on the study, and the findings were published the Annals of Internal Medicine Sept. 23.

Private equity firms reduced staffing and salaries in those emergency departments, and researchers suggested that could be tied to the increased mortality in the emergency departments.

Emergency department salary expenses dropped 18.2% in the hospitals after being acquired by private equity firms. Across the entire hospital, private equity firms reduced salaries by 16.6% and staffing by 11.6%, the study found.

Zirui Song, associate professor of health care policy in the Blavatnik Institute at Harvard Medical School and an associate professor of medicine at Massachusetts General Hospital, was one of the authors of the study. In a release from Harvard, Song stated that private equity firms often cut staffing to improve the financial returns for investors.

“Among Medicare patients, who are often older and more vulnerable, this study shows that those financial strategies may lead to potentially dangerous, even deadly consequences,” Song said in the release.

Researchers examined outcomes among 1 million Medicare patients in 49 hospitals after the completion of private equity deals. They also compared outcomes with more than 6.1 million emergency department visits across 293 other hospitals.

They found emergency departments in hospitals owned by private equity firms had 7 additional deaths per 10,000 visits. Hospitals without private equity ownership had 52 deaths per 10,000 visits in their emergency departments, compared to 59 deaths per 10,000 ER visits in hospitals acquired by private equity firms.

Private equity hospitals transferred patients more frequently than other hospitals, researchers found.

Emergency departments in private equity hospitals witnessed a 4.2% increase in transfers, while ICUs in those hospitals experienced a 10.6% increase in transfers, compared to other acute hospitals, according to the study.

“After private equity acquisition, hospitals on average reduced salaries and staffing relative to nonacquired hospitals, notably in the EDs and ICUs, which are higher-acuity and staffing-sensitive areas. This decreased capacity to deliver care may explain the increased patient transfers to other hospitals, shortened ICU lengths of stay, and increased ED mortality,” the authors wrote.

The researchers compared mortality in the intensive care units but found no increase in the death rate in private equity hospitals. The study was financed primarily by the National Institutes of Health and the Agency for Healthcare Research and Quality.

The study has gained wide coverage in the national press and figures to prompt more debate about patient safety in private equity hospitals. Private equity firms operate a quarter of ERs nationwide, as of March 2024, Vox reported.

Republican and Democratic lawmakers have expressed growing concerns over private equity involvement in hospitals and health systems.

The Senate Budget Committee issued a blistering 171-page report in January which found that private equity investments in hospitals are profitable for investors, but patients aren’t faring as well. The report was titled: “Profits over patients.”

Pennsylvania Gov. Josh Shapiro and lawmakers have looked at tighter regulations governing private equity ownership of healthcare facilities. They vowed to take action after Prospect Medical Holdings, owners of Crozer Health, shut down the system and its two hospitals in the Philadelphia suburbs: Crozer-Chester Medical Center and Taylor Hospital.

JAMA published a study in January which also linked private equity ownership to problems with the patient care experience.

Patient ratings of hospitals dropped after those facilities were acquired by private equity firms, and they fell below the patient scores of other hospitals, that study found.