Key Takeaways
- • Private equity acquisition of hospitals was associated with a 27% increase in patient falls and a 38% increase in infections, according to a study led by Dr. Zirui Song from Harvard Medical School analyzing Medicare data from 2009–2019.
- • The research compared 51 hospitals acquired by private equity firms against 259 control hospitals matched by year, ownership type, geography, and other factors, finding a 25% overall increase in adverse hospital-acquired conditions post-acquisition.
- • Study findings indicate that private equity ownership is linked to poorer patient health outcomes and increased societal costs, extending beyond the cost-cutting operational model that typically characterizes PE hospital acquisitions.
- • The analysis examined hospital-acquired conditions including infections, blood clots, falls, and other adverse events—health problems patients develop during hospitalization rather than upon admission.
- • Private equity hospital ownership has expanded substantially over the past decade, with approximately 8.5% of all private hospitals now owned or operated by PE firms as of March 2025.
Summary
A National Institutes of Health-supported study published on January 23, 2024, found that private equity acquisition of hospitals is associated with substantial increases in patient harm, including a 27% rise in falls and a 38% increase in infections. The research, led by Dr. Zirui Song from Harvard Medical School, analyzed Medicare data spanning 2009 to 2019, comparing hospital-acquired conditions at 51 hospitals acquired by private equity during that period against 259 control hospitals matched across multiple dimensions including year studied, ownership type, and geographic location.
Hospital-acquired conditions—health problems patients develop during hospitalization that were not present upon admission—served as the primary metric for measuring care quality. These conditions include surgical site infections, central line–associated bloodstream infections, blood clots, and falls. The study's findings revealed a 25% overall increase in adverse events at private equity-owned facilities, substantially higher than at comparable non-PE hospitals.
The traditional private equity acquisition model typically involves using investor capital and debt financing to purchase a hospital, followed by aggressive cost reduction, real estate divestiture, and eventual asset resale for profit within several years. Prior research from Song's team had already documented that private equity acquisitions increase costs to society overall. This new analysis extends that finding by demonstrating quality-of-care degradation alongside financial impacts—a critical distinction for institutional investors evaluating PE healthcare strategies and their systemic risk implications.
The study also noted a 12% increase in patient transfers and a 36% increase in transfers for sepsis at private equity-owned hospitals compared to controls. These findings underscore the operational trade-offs inherent in PE cost-cutting models, suggesting that staffing reductions, resource constraints, or operational changes following acquisition may compromise patient safety protocols and clinical outcomes.
Private equity's footprint in hospital ownership has expanded considerably over the past decade. As of March 2025, private equity firms own or operate 488 hospitals, representing approximately 8.5% of all private (non-government) hospitals in the United States, making this sector increasingly material to institutional investors and policymakers focused on healthcare quality and economic efficiency.
Hospital-acquired conditions—health problems patients develop during hospitalization that were not present upon admission—served as the primary metric for measuring care quality. These conditions include surgical site infections, central line–associated bloodstream infections, blood clots, and falls. The study's findings revealed a 25% overall increase in adverse events at private equity-owned facilities, substantially higher than at comparable non-PE hospitals.
The traditional private equity acquisition model typically involves using investor capital and debt financing to purchase a hospital, followed by aggressive cost reduction, real estate divestiture, and eventual asset resale for profit within several years. Prior research from Song's team had already documented that private equity acquisitions increase costs to society overall. This new analysis extends that finding by demonstrating quality-of-care degradation alongside financial impacts—a critical distinction for institutional investors evaluating PE healthcare strategies and their systemic risk implications.
The study also noted a 12% increase in patient transfers and a 36% increase in transfers for sepsis at private equity-owned hospitals compared to controls. These findings underscore the operational trade-offs inherent in PE cost-cutting models, suggesting that staffing reductions, resource constraints, or operational changes following acquisition may compromise patient safety protocols and clinical outcomes.
Private equity's footprint in hospital ownership has expanded considerably over the past decade. As of March 2025, private equity firms own or operate 488 hospitals, representing approximately 8.5% of all private (non-government) hospitals in the United States, making this sector increasingly material to institutional investors and policymakers focused on healthcare quality and economic efficiency.
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