Impact of Private Equity on Medicare Patient Outcomes: A Study

An analysis of Medicare fee-for-service claims from 2010 to 2019 highlights concerns about private equity acquisitions in the healthcare sector. The study reveals that hospitals acquired by private equity firms may see deteriorating clinical outcomes for older patients with respiratory conditions like asthma, chronic obstructive pulmonary disease (COPD), and pneumonia. The research focused on data from 41 private equity-owned hospitals compared to 192 similar hospitals, examining cases involving Medicare beneficiaries aged 65 and older.

The study indicates no significant changes in patient demographics or risk profiles post-acquisition, suggesting that the variations in clinical results arise from operational differences rather than patient factors. Notably, private equity hospitals reported an 8.3 percentage point increase in 30-day hospital revisit rates for asthma patients, contrasting with non-private equity institutions. Although COPD patients also showed a modest 0.9 percentage point increase in revisit rates, in-hospital or 30-day mortality rates for asthma did not significantly differ.

COPD patients in private equity-owned hospitals experienced a rise in revisit rates, hinting at possible issues in discharge procedures and follow-up care. Conversely, pneumonia cases associated with these hospitals showed a slight increase in in-hospital mortality rates, though revisit and 30-day mortality rates were stable. These findings emphasize the need for enhanced scrutiny of private equity acquisition models to ensure quality care and safeguard patient outcomes effectively.