Most people don’t think about who owns a hospital where they’re being treated. For a scheduled treatment or procedure, they go where their doctor recommends and has admitting privileges. In an emergency, they generally go to the closest one. Some hospitals have a reputation for being the best when it comes to particular diseases, like cancer.
Increasingly, American hospitals are being purchased by private equity firms. These firms have so far invested approximately $1 trillion in health care companies (including nursing homes) throughout the country.
Staff layoffs are a key reason for adverse events and fatalities
These firms are focused on profitability. That means they typically take cost-cutting measures like laying off staff and possibly not replacing and updating equipment as often as necessary.
The effects of the growing role of private equity firms in hospitals have been examined in multiple studies – and the results are concerning. For example, the rate of preventable adverse events (including falls, bedsores and central line infections) has been found to increase an average of 25% after a private equity firm took over a facility.
A recent study by researchers at Harvard found that fatality rates in emergency departments (EDs) in hospitals acquired by private equity firms were 13% higher than those of comparable hospitals not owned by private equity firms.
The leading culprit behind these disturbing numbers has been identified as the cost-cutting measures quickly implemented by private equity firms. Loss of staff is particularly key. Researchers have noted a drop in the number of full-time employees (FTE). They have also found that less money was being invested in emergency and intensive care.
Whatever the reason for cost-cutting measures implemented by a hospital, it’s no defense for poor care that causes harm or worse to patients. Patients and family members who have lost loved ones can and should determine whether they can pursue a medical malpractice or other legal claim to seek justice and compensation.