Private equity takeover of hospitals led to rise in Medicare emergency patient deaths, says study

A newly published study in *Annals of Internal Medicine* provides quantified evidence that private equity acquisition of hospitals correlates with increased mortality among Medicare emergency department patients. The research compared outcomes across 49 private equity-acquired hospitals and 293 non-PE control institutions, identifying seven additional deaths per 10,000 patients in emergency departments of PE-owned facilities—translating to approximately 700 excess deaths among the one million emergency department visits encompassed by the study sample. All patient records analyzed involved Medicare beneficiaries.

The study's methodology examined staff levels, wage structures, and patient mortality outcomes as primary variables. Private equity-acquired hospitals demonstrated materially reduced staffing levels and lower compensation compared to their non-PE counterparts, suggesting cost-cutting measures as a potential mechanism driving adverse outcomes. This aligns with the commonly cited private equity operating model focused on operational efficiency and margin expansion.

The mortality findings form part of a broader empirical pattern. Researchers identified multiple correlated adverse outcomes across PE healthcare acquisitions, including elevated mortality in acquired nursing homes, increased post-operative complications following routine inpatient surgeries, and higher incidence of hospital-acquired conditions such as bloodstream infections and fall-related injuries. Martin Kenney, distinguished professor at the University of California, Davis and author of *Private Equity and the Demise of the Local*, characterized the consistency of findings across independent studies: "Private equity takes over things in the medical field, quality goes down, prices go up."

The regulatory environment has begun responding to the accumulating evidence. The Department of Health and Human Services formally condemned private equity's role in patient outcome deterioration toward the conclusion of the Biden administration, marking significant governmental acknowledgment of systemic quality concerns. For institutional investors with healthcare holdings or exposure to PE-backed medical facilities, the study presents material operational and reputational risk considerations within portfolio governance frameworks.