Clinical question: How does acquisition by private equity firms impact patient outcomes in emergency departments (EDs) and intensive care units (ICUs), and how is this related to changes in hospital staffing?
Background: Over the last two decades, medical practices, skilled nursing facilities, and hospitals have increasingly been acquired by private equity. Currently, around 460 U.S. hospitals have private equity owners. Differing from traditional for-profit ownership, private equity firms pool large amounts of borrowed capital to acquire businesses that range from restaurant chains to medical practices, aiming for rapid resale to maximize profit. Ethicists, public health researchers, and watchdog organizations have raised concerns about the fundamental mismatch between these organizations’ goals to maximize profit and hospitals’ duties to provide patient care and access. Several prior studies have raised concerns about the quality of care at private equity-owned facilities.
Study Design: Matched difference-in-differences analysis
Setting: Hospital-level cost and claim data from U.S. hospitals that were acquired by private equity in 2010 and 2017 and matched with control hospitals that were not.
Synopsis: Researchers used RAND Corporation hospital cost data and Medicare claims to compare 49 hospitals that had undergone private equity acquisition between 2010 and 2017 with 293 control hospitals matched on geographic region, size, and temporality of data. Overall, hospitals that had been acquired by private equity experienced a 13.4% increase in ED mortality as compared to controls. Private equity-acquired hospitals also saw increased transfers of ED and ICU patients to other facilities at a rate of 4.2% and 10.6%, respectively. No significant difference was seen in ICU mortality. Over this same period, private equity-acquired hospitals reduced ED salary expenditures by 18.2% and ICU salary expenditures by 15.9%. Of note, patient comorbidity and payer mix did not change significantly in either group of hospitals over this period. Although this study demonstrates a notable correlation between staffing reduction, a known profit-maximizing tactic employed by private equity owners, and adverse patient outcomes, further work may be needed to demonstrate causation. Confounding factors, for example, other cost-cutting practices, may have also contributed to differences in outcomes.
Bottom line: Private equity acquisition of hospitals is correlated with decreased staffing, increased ED mortality, and increased transfers of ED and ICU patients to other hospitals.
Citation: Kannan S, et al. Hospital staffing and patient outcomes after private equity acquisition. Ann Intern Med. 2025;178(11):1529-1538. doi:10.7326/ANNALS-24-03471.
Dr. Osipov
Dr. Osipov is a hospitalist and associate professor of internal medicine at the University of North Carolina in Chapel Hill, N.C.