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Medicare Patients May Face Increased Risks at Private Equity Hospitals, Study Suggests

A recent study published in JAMA sheds light on concerning findings regarding patient outcomes at hospitals owned by private equity (PE) firms.

The research indicates that patients admitted to PE-owned hospitals, including Medicare beneficiaries, are more likely to experience adverse events such as infections or falls compared to those in other hospitals.

Study: 25% Surge in Hospital-Acquired Conditions in Private Equity-Owned Hospitals

Key findings from the study include a 25% increase in hospital-acquired conditions among Medicare beneficiaries admitted to PE hospitals, despite these facilities often admitting lower-risk patients. 

Patients at PE-backed hospitals also faced a nearly 38% increased chance of central line infection and a 27% higher likelihood of falling compared to patients in control facilities.

The study’s authors concluded that PE-owned hospitals may deliver a poorer quality of inpatient care post-acquisition, raising concerns about the role of private equity in healthcare delivery. 

Over the past decade, PE firms have invested significantly in healthcare, purchasing over 200 hospitals and spending $1 trillion on deals.

The PE model, which involves buying hospitals with the aim of selling them for profit within a few years, has generated wealth for investors but faced scrutiny from various stakeholders, including academics, providers, and lawmakers. 

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Medicare Beneficiaries Face Higher Risks at Private Equity-Owned Hospitals

A recent study published in JAMA sheds light on concerning findings regarding patient outcomes at hospitals owned by private equity (PE) firms.

Previous research has associated PE ownership in healthcare with higher patient costs, reduced staffing, and higher short-term mortality rates in nursing homes.

Lawmakers have responded to these concerns by launching investigations into the impact of private equity on healthcare. 

In December, a bipartisan investigation was announced, and Senators Elizabeth Warren and Richard Blumenthal inquired about the acquisition and pricing strategy of PE-backed US Anesthesiology Partners. 

The Biden administration has also taken steps to scrutinize acquisitions and increase transparency to curb private equity’s consolidation in the industry.

Despite the study’s findings, not all stakeholders agree with its conclusions. A response from the American Investment Council argued that private equity investments improve and expand access to care, particularly in low-income and rural communities. 

The debate surrounding the impact of private equity in healthcare continues as policymakers and industry players navigate the complexities of ownership models and their implications for patient care.

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