In a recent study, participants reported worse patient care experience and staff responsiveness following the private equity acquisition of hospitals.
A new study revealed patient care experience worsened after the private equity acquisition of hospitals.1
“The decline in patient care experience after private equity acquisition may, at least in part, reflect changes in organizational structure made by these firms,” wrote investigators, led by Anjali, Bhatla, MD, MBA, from Johns Hopkins Department of Medicine.
Over the past decade, private equity acquisitions of hospitals have increased in the US, leading to scrutiny among US congressional committees and healthcare leaders.2 Many worry acquisitions could negatively impact patient care.
Research has shown that private equity acquisitions of hospitals lead to reduced staffing and increased net income. When it comes to patients, some studies suggest that acquisitions lower mortality, and others demonstrate that patients have greater adverse events after acquisition.
Research has yet to focus on how the acquisition affects patient care experience. Poor patient experiences with health systems are linked to slower illness recovery, treatment non-adherence, and greater healthcare use.
Investigators conducted a national study to examine the impact of private equity acquisition of hospitals between 2008 and 2019 on patient care experience.1 The primary outcome was patients’ overall rating scale and patients’ willingness to recommend the hospital. Secondary outcomes included staff responsiveness and discharge information, communication (with nurses or doctors and about medications), and hospital environment (cleanliness and quiet).
The team identified 73 US hospitals acquired by a private equity firm between 2010 and 2017 using mergers and acquisitions data from Irving Levin Associates and Pitchbook. They excluded hospitals already owned by a private equity firm and later sold to another private equity firm during the study period. Investigators obtained information on hospital characteristics via the American Hospital Association annual survey and the Centers for Medicare & Medicaid Services.
Acquired hospitals were matched with 293 not-acquired control hospitals based on bed size, ownership type (for-profit, nonprofit, government), teaching hospital status, metropolitan vs nonmetropolitan location, safety-net status, census geographic regions, and year.
Patient care experience was measured with the Hospital Consumer Assessment of Healthcare Providers and Systems survey, comprised of 29 questions that asked recently discharged patients about their care experiences during their hospitalization, which was obtained through CMS Hospital Care files. The survey is administered monthly to a random sample between 48 hours and 6 weeks after discharge.
Investigators evaluated the outcomes 3 years pre- and post-acquisition for each hospital. For 15 hospitals acquired in 2010, the team included 2 years of pre-acquisition data; for 18 hospitals acquired in 2017, they included 2 years of post-acquisition data due to the pandemic.
The team observed a decrease in high patient ratings (9/10 or 10/10) at private equity-acquired hospitals compared with control hospitals (difference-in-differences estimate, -2.4 percentage points; 95% confidence interval [CI], -3.9 to -0.9). The difference increased yearly, with the greatest difference in 3 years (difference-in-differences estimate, -5.2 percentage points; 95% CI, -8.8 to -1.5).
“These findings suggest that the incremental effects of organizational and structural changes implemented by private equity may accumulate over time,” investigators wrote.
During the post-acquisition period, the number of patients recommending the hospital dropped at private equity-acquired hospitals (66.9% pre-acquisition vs 65.5% post-acquisition) and increased in control hospitals (68.2% vs 69.3%) (difference-in-differences, -2.1 percentage points; 95% CI, -3.6 to -0.7). The difference increased with each year after the acquisition, with the largest difference in year 3 (difference-in-differences, -4.4 percentage points; 95% CI, -8.0 to -0.70).
Patient-reported staff responsiveness (difference-in-differences estimate, −1.3 percentage points; 95% CI, −2.4 to −0.2) and doctors’ communication decreased after the acquisition, though the latter was non-significant. There was no difference in nurse communication, discharge instructions, or hospital cleanliness and quietness.
“These findings are important for policymakers weighing the future of private equity acquisitions in health care because patient experience scores may reflect changes in practice that are otherwise difficult to capture with other types of outcome measures (eg, readmissions),” investigators wrote. “Experts have suggested that improved oversight of acquisitions, including increased transparency of private equity transactions and the implementation of policies to protect patients (such as minimum staffing ratios) should be considered as the influence of private equity in the health care sector continues to grow.”
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