Patients Pay the Price of Private Equity Acquisition
“The exponential growth in private equity ownership in hospital and physician practices in the past few decades has left a majority of health care providers disillusioned with cost-cutting practices resulting in staffing reductions and ratios that sacrifice patient care as part of their approach to running clinical operations ‘lean,’ ” Robert Glatter, MD, an emergency medicine physician at Lenox Hill Hospital, New York, NY, said in an interview.
“While private equity companies argue that such practices are essential to meet their bottom line and increase operating margins, it doesn’t translate into ideal care for patients; lean practices in staffing which focus on profits at the expense of patient safety and quality of care.
“When you look at patient outcomes, it is the patients who ultimately pay the price — not the shareholders,” Dr. Glatter said. “This translates to higher risks of hospital-acquired complications including falls and blood-borne infections, including surgical site infections, as noted by the authors of the current study when private equity took over operations in hospitals.
Dr. Glatter said he was not surprised by the findings. “In my world, patient care and safety come first. Period,” he said. “Would you want your family’s health and well-being sacrificed in the name of company profits? I think it’s a rhetorical question, but one that every health care provider who works in a hospital or practice run by private equity must consider.”
Despite a decline in utilization at private equity hospitals as noted in the current study, hospital-acquired infections and adverse outcomes still increased, illustrating a decline in quality of care, said Dr. Glatter. “While these disparities were not evident when looking at 30-day outcomes, they demonstrate how operational changes impact patient outcomes in the near term. Having younger and healthier patients, and fewer Medicare and Medicaid patients combined with more hospital transfers to non–private equity run hospitals, resulted in lower in-hospital mortality in the near term, which was not apparent at 30 days post discharge,” he said.
“The explosion of hospital mergers and consolidation in the past several decades has led to skyrocketing health care costs at the expense of patient satisfaction, but also health care providers’ autonomy to manage and maintain quality care for their patients,” Dr. Glatter said.
“It’s important to understand that private equity’s interests are primarily aligned with their shareholder’s interests, as opposed to patients’ outcomes and interests,” Dr. Glatter told this news organization. “Within 5-7 years, the goal is to increase operating margins and profits and then sell a practice or hospital, which is ultimately part of a ‘health care portfolio,’ ” he said.
Additional research is needed to examine whether other hospital-acquired conditions including pressure sores, catheter-associated UTIs, methicillin-resistant Staphylococcus aureus infections, Clostridium difficile infections, and nosocomial pneumonia have increased in hospitals following private equity acquisition, given the overall national decline in these events, he said.
“At the same time, it is vital to also look at management and readmission rates for patients with strokes, heart attacks, and congestive heart failure in hospitals that are run by private equity,” Dr. Glatter noted. “These are important benchmarks of care monitored by CMS that reflect the quality of care that payers ultimately factor into reimbursement.”
Examining the metrics associated with these diagnoses will help in understanding whether private equity-managed facilities are leading to adverse outcomes and mortality, increased length of stay, hospital readmissions, and increased nosocomial infections, apart from other aspects of patient experience, Dr. Glatter added.
The study was supported by the National Heart, Lung, and Blood Institute, the National Institute on Aging, and Arnold Ventures. The researchers had no financial conflicts to disclose. Dr. Glatter had no financial conflicts to disclose and serves on the Medscape Emergency Medicine Editorial Board.
A version of this article appeared on Medscape.com.