Association Between Hospital Private Equity Acquisition and Outcomes of Acute Medical Conditions Among Medicare Beneficiaries

Cerullo, Marcelo; Yang, Kelly Kaili; Maddox, Karen E. Joynt; McDevitt, Ryan C.; Roberts, James W.

doi:10.1001/jamanetworkopen.2022.9581

Cited by 16 publications

(34 citation statements)

References 44 publications

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“…6,7 Early research has found hospital acquisitions to be associated with a small increase in charge-to-cost ratio and net income, 10 a higher likelihood of providing more profitable hospital-based services, and mixed effects on quality. 9,12 It is unclear whether these findings generalize to physician practices, which have different business structures, service lines, and management practices.…”

Section: Introductionmentioning

confidence: 99%

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

et al. 2022

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IMPORTANCE Private equity acquisitions of physician practices in the US have been increasing rapidly; however, the implications for health care delivery and spending are unclear.OBJECTIVE To examine changes in prices and utilization associated with private equity acquisitions of physician practices across multiple specialties. DESIGN, SETTINGS, AND PARTICIPANTSThis was a difference-in-differences event study of US physician practices specialized in dermatology, gastroenterology, and ophthalmology that were acquired by private equity firms from 2016 to 2020. Within each specialty, each private equity−acquired (PE-acquired) practice was matched with as many as 5 control practices based on the preacquisition number of unique patients, encounters, risk score, share of services billed out-ofnetwork, and spending. The PE-acquired practices were compared with matched controls through year 2 after acquisition, using a difference-in-differences event study. Data analyses were performed from March 2021 to February 2022. EXPOSURES Private equity acquisition of physician practices.MAIN OUTCOMES AND MEASURES Measures of spending and utilization, including the charge and price (amount paid) per claim, new and unique patients, and total encounters. RESULTSCompared with the 2874 control practices, the 578 PE-acquired physician practices exhibited an average increase of $71 (+20.2%) charged per claim (95% CI, 13.

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Section: Introductionmentioning

confidence: 99%

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

et al. 2022

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“…22 Further, hospital acquisition reduced in-hospital and 30-day mortality in patients admitted with acute myocardial infarction. 21 On the negative side, residents of acquired nursing homes experienced a 10% increase in short term mortality and declines in well-being (eg, lower mobility, higher pain intensity scores). 5,6 In this context, survey data support physician concerns.…”

Section: Discussionmentioning

confidence: 99%

“…Indeed, findings with respect to the effects of acquisition on patient quality are mixed. 5,21 On the positive side, a study demonstrated that acquired hospitals improved their performance on quality measures for patients hospitalized with acute myocardial infarction and pneumonia. 22 Further, hospital acquisition reduced in-hospital and 30-day mortality in patients admitted with acute myocardial infarction.…”

Section: Discussionmentioning

confidence: 99%

Acquisition of Urology Practices by Private Equity Firms and Performance in the Merit-based Incentive Payment System

Faraj,

Kaufman,

Herrel

et al. 2023

Urology Practice

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Introduction: Private equity is increasingly engaged in the acquisition of urology practices. The implications of strategies to enhance practice value deployed by these firms for patients are unclear. Methods:We conducted a retrospective study of urologist performance in the MIPS (Merit-based Incentive Payment System) program for 2017 to 2020 using national Medicare data from the Quality Payment Program file. The primary outcome was the overall MIPS score. Secondary outcomes included MIPS component scores (ie, quality, interoperability, improvement activities, cost) and the percentage of urologists receiving a bonus payment. Generalized estimating equations were used to estimate the relationship between private equity acquisition and outcomes using a difference-in-differences framework.Results: Between 2017 and 2020, 181 urologists were in a urology practice acquired by private equity with MIPS data available the year before and after acquisition. Compared to urologists in practices not acquired by private equity, those in acquired practices had worse overall MIPS performance after acquisition (difference-in-differences estimate, À14 points, P ¼ .04). The decrease in the overall score was driven by worse performance in the quality score (difference-in-differences estimate, À28 points, P < .001). Finally, acquisition resulted in a decrease in the percentage of urologists receiving bonus payments (difference-in-differences estimate, À43%, P < .001).Conclusions: Private equity acquisition of urology practices was associated with significantly lower MIPS performance. As private equity acquisition of urology practices becomes more

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“…rivate equity firms have increasingly acquired hospitals and physician practices. [1][2][3][4][5][6][7][8][9][10] This has garnered scrutiny from policymakers and the public, including the Biden administration and several US Senate and House committees. [11][12][13][14] Central to the concern over such acquisitions are the implications for patients-notably the quality of care-given the incentives of private equity to generate financial returns on investment quickly.…”

mentioning

confidence: 99%

“…Within private, nongovernment hospitals, private equity has an often distinct business model, in which the acquired entity typically assumes debt in the initial acquisition and is sold within a short time frame (often within 3-7 years). 6 Early evidence [7][8][9][10] showed that private equity acquisition was associated with increased charges, reduced staffing, use of profitable service lines, a decreased proportion of patients with Medicare, and increased net income.…”

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confidence: 99%

Changes in Hospital Adverse Events and Patient Outcomes Associated With Private Equity Acquisition

Kannan,

Bruch,

Song

2023

JAMA

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ImportanceThe effects of private equity acquisitions of US hospitals on the clinical quality of inpatient care and patient outcomes remain largely unknown.ObjectiveTo examine changes in hospital-acquired adverse events and hospitalization outcomes associated with private equity acquisitions of US hospitals.Design, Setting, and ParticipantsData from 100% Medicare Part A claims for 662 095 hospitalizations at 51 private equity–acquired hospitals were compared with data for 4 160 720 hospitalizations at 259 matched control hospitals (not acquired by private equity) for hospital stays between 2009 and 2019. An event study, difference-in-differences design was used to assess hospitalizations from 3 years before to 3 years after private equity acquisition using a linear model that was adjusted for patient and hospital attributes.Main Outcomes and MeasuresHospital-acquired adverse events (synonymous with hospital-acquired conditions; the individual conditions were defined by the US Centers for Medicare &amp; Medicaid Services as falls, infections, and other adverse events), patient mix, and hospitalization outcomes (including mortality, discharge disposition, length of stay, and readmissions).ResultsHospital-acquired adverse events (or conditions) were observed within 10 091 hospitalizations. After private equity acquisition, Medicare beneficiaries admitted to private equity hospitals experienced a 25.4% increase in hospital-acquired conditions compared with those treated at control hospitals (4.6 [95% CI, 2.0-7.2] additional hospital-acquired conditions per 10 000 hospitalizations, P = .004). This increase in hospital-acquired conditions was driven by a 27.3% increase in falls (P = .02) and a 37.7% increase in central line–associated bloodstream infections (P = .04) at private equity hospitals, despite placing 16.2% fewer central lines. Surgical site infections doubled from 10.8 to 21.6 per 10 000 hospitalizations at private equity hospitals despite an 8.1% reduction in surgical volume; meanwhile, such infections decreased at control hospitals, though statistical precision of the between-group comparison was limited by the smaller sample size of surgical hospitalizations. Compared with Medicare beneficiaries treated at control hospitals, those treated at private equity hospitals were modestly younger, less likely to be dually eligible for Medicare and Medicaid, and more often transferred to other acute care hospitals after shorter lengths of stay. In-hospital mortality (n = 162 652 in the population or 3.4% on average) decreased slightly at private equity hospitals compared with the control hospitals; there was no differential change in mortality by 30 days after hospital discharge.Conclusions and RelevancePrivate equity acquisition was associated with increased hospital-acquired adverse events, including falls and central line–associated bloodstream infections, along with a larger but less statistically precise increase in surgical site infections. Shifts in patient mix toward younger and fewer dually eligible beneficiaries admitted and increased transfers to other hospitals may explain the small decrease in in-hospital mortality at private equity hospitals relative to the control hospitals, which was no longer evident 30 days after discharge. These findings heighten concerns about the implications of private equity on health care delivery.

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Association Between Hospital Private Equity Acquisition and Outcomes of Acute Medical Conditions Among Medicare Beneficiaries

Cited by 16 publications

References 44 publications

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

Association of Private Equity Acquisition of Physician Practices With Changes in Health Care Spending and Utilization

Acquisition of Urology Practices by Private Equity Firms and Performance in the Merit-based Incentive Payment System

Changes in Hospital Adverse Events and Patient Outcomes Associated With Private Equity Acquisition

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