Hospital Staffing and Patient Outcomes After Private Equity Acquisition

Area of Science:

• Healthcare Management
• Health Economics
• Patient Outcomes Research

Background:

• Private equity (PE) acquisitions can alter hospital operations, potentially affecting staffing levels and patient care.
• Understanding the impact of PE ownership on hospital staffing and patient outcomes is crucial for healthcare policy and practice.

Purpose of the Study:

• To analyze changes in hospital staffing and patient outcomes within emergency departments (EDs) and intensive care units (ICUs) following private equity acquisition.
• To compare pre- and post-acquisition data for PE-acquired hospitals against matched control hospitals.

Main Methods:

• A matched difference-in-differences analysis was employed.
• Utilized comprehensive Medicare Part A and B claims and Cost Report data from 2009 to 2019.
• Compared 49 PE-acquired hospitals with 293 control hospitals, encompassing over 1 million ED visits and 121,000 ICU hospitalizations.

Main Results:

• PE-acquired hospitals significantly reduced ED (18.2%) and ICU (15.9%) salary expenditures relative to controls.
• Hospital-wide full-time employees decreased by 11.6% and salary expenditures by 16.6% post-acquisition.
• EDs in PE hospitals saw an increase in mortality (7.0 deaths per 10,000 visits) and a 4.2% rise in patient transfers; ICU transfers increased by 10.6%.

Conclusions:

• Private equity acquisition is associated with reduced hospital staffing and salary expenditures, especially in critical care areas like EDs and ICUs.
• These reductions correlate with adverse patient outcomes, including increased ED mortality and higher rates of patient transfers.
• Findings suggest that PE ownership may compromise the quality of care in high-acuity hospital settings.