Emergency department (ED) mortality rose, and transfers from the ED and the ICU increased in the wake of a facility’s private equity (PE) acquisition, a new study shows.

Researchers from the University of Pittsburgh, University of Chicago, and Harvard Medical School analyzed pre- and post-acquisition data for patient outcomes at hospitals bought by PE firms and compared that with similar data for hospitals that had not been acquired by such firms. The researchers focused on EDs and ICUs. Their report was published in the Annals of Internal Medicine.

They found that in-hospital mortality in the ED increased by 13.4% at PE hospitals but decreased during the same period at control hospitals. ED and ICU transfers to acute care hospitals increased by 4.2% and 10.2%, respectively, from baseline at PE-owned facilities.

Senior author Zirui Song, MD, PhD, associate professor of health care policy and medicine at Harvard Medical School, Boston, said that the increased deaths in the ED was a surprise. Transfers generally are reserved for the sickest patients, Song told Medscape Medical News. Given an increased rate of transfers at the PE-owned facilities, it would be expected that the patients left in the ED would be healthier on average.

It was “striking,” said Song, that “mortality among the remaining patients actually went up, not down.”

He also noted that mortality in the ICU did not decline, despite also having an on-average healthier population after the transfers. “It did not go up, but it also didn’t go down,” said Song.

He and his co-authors believe the most likely explanation for the rise in in-hospital deaths for ED patients and an elevated transfer rate was a 16%-18% reduction in ED and ICU salary expenditures. The researchers also documented such reductions hospital-wide, with a 12% decrease in full-time equivalent employees and a 17% decrease in salary expenditures overall post-acquisition.

The effects were more likely to be felt in the ED and ICU because those departments “are notably staffing-sensitive areas of patient care,” said Song.

PE Facilities Cut While Others Increased

The authors found that PE-owned hospitals weren’t responding to market forces when they made cuts. They were moving in the opposite direction of non-PE peer facilities. 

For instance, PE hospitals reduced ED and ICU salary expenditures after acquisition by 18% and 16%, respectively, while control hospitals increased spending. PE hospitals also reduced the number of average full-time employees per inpatient bed days. Control hospitals increased full-time employees.

The authors used hospital cost report data from the RAND Corporation and Medicare fee-for-service Part A and Part B claims to conduct the analysis. They studied acquisitions from 2010 to 2017, enabling them to have at least 1 year of claims pre-acquisition and 2 years post-acquisition.

They analyzed 1 million ED visits at 47 PE-owned hospitals, compared to 6.1 million ED visits at 270 matched control hospitals. The ICU analysis consisted of 121,080 ICU visits at the PE hospitals, compared with 760,377 ICU visits at the control facilities.

The PE hospitals had more Black and Hispanic patients and more who were eligible for both Medicaid and Medicare, but the control hospitals had slightly older patients. The two hospital groups’ patients were similar clinically, reflected by the same mean score on a comorbidity measurement.

But the authors found that PE hospitals were more likely — and quicker — to transfer patients from the ICU. For instance, some 40% of intubated patients who were transferred were transferred within 1 day of intubation, said Song. PE hospitals had a 10.6% increase in ICU transfers when compared with controls. 

The authors had a lengthy list of limitations, chief among them was the fact that not every PE acquisition is alike. “Our sample of acquired hospitals may not represent other acquisitions,” they wrote.

Still, the 270 hospitals studied are a big segment of PE-owned facilities. The Private Equity Stakeholders Project estimates that there are currently 488 PE-owned hospitals in the US, accounting for about 23% of all proprietary for-profit hospitals. 

Staffing Matters

The results of the study “do not imply causation,” but they bear further analysis, wrote the authors. They concluded that post-acquisition cost-cutting, including in salary expenditures, could contribute to changes in patient outcomes.

“Hospital care in the US, especially in the EDs and ICUs, remains a labor-intensive, face-to-face endeavor where often you need all hands-on deck to take care of a critically ill patient,” said Song. 

“Staffing levels matter for patient safety and outcomes,” he said.

The study was supported by grants from the National Heart, Lung, and Blood Institute, the National Institute on Aging, the Agency for Healthcare Research and Quality, and Arnold Ventures. Song disclosed that he has received consulting fees for serving as an expert witness in legal cases and on a physician panel advising the Research Triangle Institute on risk adjustment in the Medicare program.

Alicia Ault is a Saint Petersburg, Florida-based freelance journalist whose work has appeared in many health and science publications, including Smithsonian.com. You can find her on X @aliciaault and on Bluesky @aliciaault.bsky.social.