Evaluating trends in private equity ownership and impacts on health outcomes, costs, and quality: systematic review

Abstract

Objective To review the evidence on trends and impacts of private equity (PE) ownership of healthcare operators. Design Systematic review. Data sources PubMed, Web of Science, Embase, Scopus, and SSRN. Eligibility criteria for study selection Empirical research studies of any design that evaluated PE owned healthcare operators. Main outcome measures The main outcome measures were impact of PE ownership on health outcomes, costs to patients or payers, costs to operators, and quality. The secondary outcome measures were trends and prevalence of PE ownership of healthcare operators. Data synthesis Studies were classified as finding either beneficial, harmful, mixed, or neutral impacts of PE ownership on main outcome measures. Results across studies were narratively synthesized and reported. Risk of bias was evaluated using ROBINS-I (Risk Of Bias In Non-randomised Studies of Interventions). Results The electronic search identified 1778 studies, with 55 meeting the inclusion criteria. Studies spanned eight countries, with most (n=47) analyzing PE ownership of healthcare operators in the US. Nursing homes were the most commonly studied healthcare setting (n=17), followed by hospitals and dermatology settings (n=9 each); ophthalmology (n=7); multiple specialties or general physician groups (n=5); urology (n=4); gastroenterology and orthopedics (n=3 each); surgical centers, fertility, and obstetrics and gynecology (n=2 each); and anesthesia, hospice care, oral or maxillofacial surgery, otolaryngology, and plastics (n=1 each). Across the outcome measures, PE ownership was most consistently associated with increases in costs to patients or payers. Additionally, PE ownership was associated with mixed to harmful impacts on quality. These outcomes held in sensitivity analyses in which only studies with moderate risk of bias were included. Health outcomes showed both beneficial and harmful results, as did costs to operators, but the volume of studies for these outcomes was too low for conclusive interpretation. In some instances, PE ownership was associated with reduced nurse staffing levels or a shift towards lower nursing skill mix. No consistently beneficial impacts of PE ownership were identified. Conclusions Trends in PE ownership rapidly increased across almost all healthcare settings studied. Such ownership is often associated with harmful impacts on costs to patients or payers and mixed to harmful impacts on quality. Owing to risk of bias and frequent geographic focus on the US, conclusions might not be generalizable internationally. Systematic review registration PROSPERO CRD42022329857.

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

“…Our findings add new clinical insights to the literature on private equity and quality, which has focused on aggregate process quality measures. [7][8][9][10]15 The 38% increase in central line-associated infections associated with private equity acquisition occurred even as these hospitals placed 16%…”

“…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 . Despite this concern, rigorous evidence on the clinical consequences of private equity acquisition remains scant …”

“…However, analogous evidence on quality of care exists only for a few hospital-level process measures, with equivocal results . One study of Medicare beneficiaries with cardiovascular and pulmonary disease also found mixed results, including lower mortality among those with acute myocardial infarction treated at private equity hospitals, which could be due to selection of healthier or lower-risk patients.…”

“…6,14 Despite this concern, rigorous evidence on the clinical consequences of private equity acquisition remains scant. 15 Private equity firms have acquired more than 200 acute care hospitals from nonprivate equity owners. 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).…”

Private Equity and Cardiovascular Health Care

“…Studies indicate that PE acquisitions of medical practices were associated with significant price increases, particularly when the firm controls a significant share of the local market. 7,8 The introduction of PE may disrupt existing care models, leading to a shift of procedures away from hospitals, which could impact patient care. Unlike health system models prioritizing long-term community relationships, PE's transactional nature may result in limited reinvestment in the community.…”