What happens to hospital income, use, and quality after a hospital is acquired by a private equity firm?

We and others have speculated about this - now, we add data to the discussion.

A short thread on our new paper in @JAMAInternalMed led by @Joe_Bruch with Zirui Song. 1/x https://twitter.com/JAMAInternalMed/status/1297926672210067456
2/x. First, why does this matter? Private equity deals in healthcare totaled $80 billion in 2019, from $23B in 2015. That's a ~250% increase over 4 years. The most active sector for investment? Healthcare providers, including hospitals, MD practices, etc. https://www.bain.com/insights/year-in-review-global-healthcare-private-equity-and-corporate-ma-report-2020/
4/x. In our paper today, we looked at 200+ PE-acquired hospitals and compared them before vs after acquisition and against similar hospitals not acquired (controls). We looked at 8 hospital income and utilization measures and 3 aggregate hospital quality measures.
5/x. What did we find? Relative to controls, PE-acquired hospitals saw increases in net income, total charge per inpatient day, and charge-to-cost ratios, suggesting they began charging more and/or cutting costs after acquisition, which resulted in increased net income.
6/x. We also found PE hospitals discharged fewer Medicare patients after acquisition but Medicaid and total discharges were similar. So it's possible PE hospitals began seeing a higher proportion of privately insured patients, leading to higher payment rates -> higher net income.
7/x. What about quality? We could only look at process metrics & found that aggregate quality measures increased slightly for heart attacks and pneumonia (no change for heart failure)

Whether this reflects truly better quality or better compliance & reporting is an open question
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