Understanding the Impact of Private Equity Acquisitions on Hospital Safety – A Medical Malpractice Lawyer’s Perspective

A recent investigation published in JAMA has sparked serious concerns within the healthcare community, especially among those of us in the field of medical malpractice law. This study reveals that patients are significantly more likely to experience adverse events, such as infections or falls, in hospitals owned by private equity (PE) firms.

Increased Risks for Patients

The study highlights a 25% increase in hospital-acquired conditions among Medicare beneficiaries admitted to PE hospitals. Patients have a nearly  38% increased chance of experiencing a central line infection and a 27% higher likelihood of falls in PE-backed hospitals compared to control facilities.

These findings indicate a potential decline in the quality of inpatient care post-PE acquisition. As medical malpractice attorneys, this raises immediate red flags regarding patient safety and the standard of care provided.

PE firms often purchase hospitals to sell them for profit within a few years. This short-term investment strategy might lead to cost-cutting measures that could compromise patient care, contributing to the observed increase in adverse events. This scenario highlights the necessity for rigorous oversight and accountability in healthcare provision, particularly when financial incentives might conflict with patient welfare.

Legislative Scrutiny

Lawmakers and the Biden administration have been calling for more oversight of private equity’s role in healthcare. This study adds weight to those calls. Efforts by the Federal Trade Commission and Department of Justice to scrutinize acquisitions and increase transparency are crucial steps in addressing these concerns.

While the study has faced criticism from some quarters, such as the American Investment Council, it undeniably sheds light on a critical issue. The rise in hospital-acquired infections and falls in PE-owned hospitals is not just a healthcare issue; it’s a legal and ethical one. As medical malpractice lawyers, we view these findings as a call to action for enhanced oversight and a reevaluation of how healthcare delivery is influenced by private equity investments. Patient safety and care quality must remain at the forefront of healthcare services, regardless of ownership and financial models.