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Private Equity Acquisitions Linked to Increased ER Deaths at Hospitals
A new study published in the Annals of Internal Medicine reveals a troubling trend: increased patient mortality rates in emergency rooms following hospital acquisitions by private equity firms. Researchers from Harvard Medical School analyzed Medicare claims data from 2009 to 2019, comparing outcomes at hospitals recently purchased by private equity firms with a control group of similar hospitals.
The study found a 13% increase in deaths among Medicare patients in the ERs of hospitals following private equity acquisition. This translates to seven additional deaths per 10,000 visits. During the same period, death rates in hospitals not acquired by private equity actually declined, mirroring national trends.
Researchers attribute this alarming increase in mortality to cost-cutting measures implemented by private equity firms, particularly staffing reductions. Data revealed an 18% reduction in ER salaries and a 16% reduction in ICU salaries at acquired hospitals, accompanied by a nearly 12% decrease in overall staffing.
“Staffing cuts are one of the common strategies used to generate financial returns,” explained Dr. Zirui Song, the study’s senior researcher and an associate professor at Harvard Medical School. “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.”
The study also noted an increase in patient transfers from both the ER and ICU following private equity acquisitions. These transferred patients tended to be sicker, requiring more intensive care. Researchers suggest that staffing cuts reduced the capacity of these hospitals to care for high-risk patients, leading to transfers and increased mortality among those remaining.
This isn’t the first time Dr. Song and his colleagues have raised concerns about the impact of private equity on healthcare.
A previous study linked private equity acquisitions to a 25% increase in preventable adverse events in hospitals. With approximately 488 U.S. hospitals currently owned by private equity firms, these findings raise serious questions about the prioritization of profits over patient safety.