Private Equity Acquisitions and Patient Care: Worsening Experiences

Private equity firms acquiring hospitals have been linked to a decline in the patient care experience, according to US survey data.

Patients at hospitals acquired by private equity firms reported lower levels of satisfaction compared to those at non-acquired hospitals.

Key measures like the percentage of patients giving a hospital a top rating or recommending it dropped significantly after private equity acquisitions.

By the third year post-acquisition, patient care experience scores were 5 percentage points lower in acquired hospitals compared to non-acquired ones, a change considered substantial.

The responsiveness of hospital staff was the primary area of decline, worsening further over time.

This decline in patient experience following private equity takeovers exceeded the national deterioration observed during the COVID-19 pandemic.

Lower patient satisfaction has broader implications, as poor experiences are associated with slower recovery, nonadherence to treatment, and greater healthcare utilization.

Private equity firms have been rapidly acquiring hospitals and healthcare facilities, raising concerns about prioritizing profits over patients.

Although some studies suggest private equity acquisitions may improve certain clinical outcomes, the overall evidence shows a decline in patient experience and an increase in adverse events in many cases.

A study involving 73 acquired hospitals and 293 matched control hospitals found that satisfaction scores remained stagnant or dropped in acquired hospitals, while scores improved slightly in control hospitals.

Private equity’s ‘flip-and-strip’ mentality, focused on maximizing profits quickly, has been flagged as a potential threat to quality care.

As private equity increasingly targets cardiology practices and ambulatory surgical centers, the concerns extend beyond hospitals.

Experts emphasize the urgent need for greater transparency, regulatory oversight, and policy interventions to protect patient care quality.

Potential solutions include:

• Transparency in private equity acquisitions.
• Stronger fraud and abuse protections.
• Enhanced Federal Trade Commission powers to monitor transactions.
• Limits on the percentage of debt used in private equity acquisitions.

The study underscores the need for a multipronged policy strategy to safeguard patients in an increasingly corporatized healthcare landscape.

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Take-Home Points:

• Patient care experience worsens significantly after private equity firms acquire hospitals.
• Satisfaction with hospital care, particularly staff responsiveness, declines within three years of acquisition.
• Poor patient experience has long-term implications, including slower recovery and increased healthcare utilization.
• Private equity’s growing influence in healthcare highlights an urgent need for transparency and regulatory oversight.
• Policymakers must implement strategies to prioritize patient care over financial interests in a corporatized healthcare system.