Private Equity Among US Psychiatric Hospitals.

Area of Science:

• Health Services Research
• Health Economics
• Psychiatric Care Quality

Background:

• Private equity (PE) investment in healthcare is rising, yet its impact on psychiatric hospital quality remains understudied.
• Patient vulnerabilities in inpatient psychiatric settings necessitate a clear understanding of ownership effects.

Purpose of the Study:

• To analyze trends in PE ownership of US psychiatric hospitals from 2013-2021.
• To examine the association between PE ownership and hospital staffing and quality metrics.

Main Methods:

• A novel dataset of PE-owned psychiatric hospitals was created using industry and web sources.
• Cross-sectional comparison of 87 PE-owned and 530 non-PE-owned hospitals using regression models.
• Analysis included staffing ratios and quality measures like restraint use and readmission rates for 617 Medicare-participating hospitals.

Main Results:

• By 2021, 14.1% of US psychiatric hospitals were PE-owned, primarily in the southern US.
• PE ownership correlated with lower registered nurse and medical social worker staffing ratios.
• PE-owned facilities exhibited improved quality indicators, including reduced restraint use and lower 30-day readmission rates.

Conclusions:

• PE ownership in psychiatric hospitals is rapidly expanding.
• Despite lower staffing, PE-owned facilities did not show evidence of lower quality based on current measures.
• Enhanced quality metrics, including patient experience, are needed to fully assess care in PE-owned psychiatric hospitals.