Private equity drains resources from U.S. hospitals: Report
(The Center Square) – Private equity ownership of hospitals across the United States leads to declining patient care and drained community resources, a new report warns.
Peter Pitts, former Associate FDA Commissioner and president of the Center for Medicine in the Public Interest, released “Barbarians at the Hospital Gates: Private Equity and its Impact on Patient Care” this month.
“Over the past two decades, private equity (PE) has come to play an increasingly influential role in the operations and management of hospitals across the United States,” the report said. “Recent reports found that PE has invested over $1 trillion into the American healthcare sector, with 20% of all for-profit hospitals owned or operated by PE firms. Disconcertingly, studies show patient experience worsens after a hospital is acquired by PE, as such acquisitions create incentives to pursue short-term returns through aggressive cost-cutting.”
Private equity firms routinely strip hospitals of assets, according to the report.
“Nationwide, in the two years after a private equity takeover, hospitals lost on average nearly one-quarter of their real estate, buildings, and equipment.