In a growing trend, private equity firms, investment groups that buy and sell companies for profit, are acquiring hospitals and healthcare systems. While these firms argue they bring needed capital and business efficiency, recent research is raising serious concerns about the potential impact on patient safety and the quality of care.

The Link Between Profit and Patient Risk

A major study published in the Annals of Internal Medicine revealed a troubling connection: after private equity firms took over hospitals, deaths in the emergency department rose by about 13%. This study, which analyzed a large dataset from Medicare, also found that these acquisitions were often followed by staffing and salary cuts and an increase in patient transfers to other facilities.

This isn't an isolated finding. Other studies have also linked private equity ownership to a higher number of hospital-acquired adverse events, such as infections and patient falls. These findings suggest that a business model focused on maximizing short-term financial returns may lead to decisions that compromise patient safety.

How the Model Works

Private equity firms operate by acquiring companies, making changes to boost profitability, and then selling them off, often within just a few years. In the healthcare sector, hospitals are attractive targets because they have a steady demand for services and offer opportunities to cut costs, consolidate operations, and charge higher prices for services like imaging or procedures. This profit-driven approach is a sharp contrast to the traditional nonprofit hospital model, where any surplus is typically reinvested back into patient care and community health.

A System of Limited Transparency

For patients, it's often a challenge to know who owns their hospital. There is no single national database that tracks private equity ownership of hospitals, making it difficult to find out if a facility is run by an investment firm.

While some states are beginning to consider more robust disclosure requirements, a uniform national policy does not yet exist. In the meantime, patients who want to investigate their hospital's ownership might have to search news reports, review state health department filings, or check the hospital's website for corporate information.

Reference

1. Miller J. Deaths rose in emergency rooms after hospitals were acquired by private equity firms. Harvard Medical School News. September 22, 2025. Accessed 09/26/2025. www.hms.harvard.edu/news/deaths-rose-emergency-rooms-after-hospitals-were-acquired-private-equity-firms

2. Kannan S, Bruch JD, Zubizarreta JR, Stevens J, Song Z. Hospital Staffing and Patient Outcomes After Private Equity Acquisition. Ann Intern Med. Published online September 23, 2025. doi:10.7326/ANNALS-24-03471

3. Miller J. What happens when private equity takes over a hospital? Harvard Medical School News. December 26, 2023. Accessed 09/26/2025. www.hms.harvard.edu/news/what-happens-when-private-equity-takes-over-hospital?utm_source=chatgpt.com