DLP Brief: Private Equity Firms Bring About New Medical Concerns

Private Equity Firms Bring About New Medical Concern
Date: January 31, 2024

A study recently concluded that hospitals that were purchased by private equity investment firms are experiencing an increase in serious medical complications. The study found that in three years following a private equity fund that purchased a hospital, there was a significant increase in surgical infections and bed sores. These complications increased by 25% compared to hospitals that had not been bought by such investors. In addition, the study indicated that there was a 38% increase in central line infections, as well as a 27% increase in falls.

When reviewed by researchers, some shared that while the data did not provide a full picture of the effects of the private equity fund, it certainly raised legitimate concerns regarding the quality of care. There seems to be a clear difference in hospitals versus those that have been taken over by private equity firms. Dr. Ashish Jha, dean of the Brown University School of Public Health, shares “This is a big deal because it’s the first piece of data that I think pretty strongly suggests that there is a quality problem when private equity takes over.”

Within the past few years, private equity firms have become more and more involved in health care. They are purchasing hospitals, nursing homes, physician practices, and even home healthcare companies. Of the hospitals that have been purchased thus far, reports have shown that a portion of those facilities have been forced to close due to significant financial distress. Not to mention, many are experiencing quality problems which has created even more issues. If this is the case, why is the private equity industry allowed to purchase facilities?

Well, Drew Maloney of the American Investment Council shares that “the private equity industry plays an essential role in providing local hospitals with the capital they need to improve patient care, expand access and drive innovation … This research doesn’t reflect private equity’s full record of strengthening health care across the country.” While the industry is meant to support healthcare, in some instances, private equity owners may be too eager to cut costs which may lead to a decline in the quality of care for patients. It comes down to the aggressiveness and eagerness that determines if private equity is positive or negative.

As always, when enrolling a loved one in a nursing home, be sure to perform personal research prior. It is important to know how a facility operates and to be aware of any potential areas of concern. The last thing we want is to put our loved ones at risk of abuse, mistreatment, or neglect.

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If someone you know is experiencing or has experienced abuse, mistreatment, or neglect from a long-term care facility, contact Dougherty Leventhal &Price today. Remember… Injury? Call DLP. (570) C-A-L-L-D-L-P.

Source

Abelson, Reed, and Margot Sanger-katz. “Serious Medical Errors Rose after Private Equity Firms Bought Hospitals.” The New York Times, The New York Times, 26 Dec. 2023, www.nytimes.com/2023/12/26/upshot/hospitals-medical-errors.html?unlocked_article_code=1.JE0.AmJm.KmPg4oFipzCw&smid=url-share.

Julia Kourpas