Study: Less staff, greater mortality in private equity hospital emergency departments

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Staff and salary levels go down, but patient mortality goes up, in emergency departments (EDs) and intensive care units (ICUs) when hospitals were acquired by private equity investors, according to new research.

In “Hospital Staffing and Patient Outcomes After Private Equity Acquisition,” published in Annals of Internal Medicine, researchers analyzed ED visits and ICU hospitalizations across 49 private equity hospitals and 293 matched control hospitals from 2009 to 2019.

They found salary expenditures for EDs and ICUs dropped 16% to 18% for private equity hospitals, similar to 12% to 17% overall reductions in total employees and salaries. Meanwhile, salary expenses and staffing levels increased at the control hospitals, according to the study.

ED fatality remained a fairly rare outcome, but Medicare beneficiaries experienced a 13.4% increase in ED deaths, or seven more ED deaths per 10,000 ED visits, in the private equity hospitals. The control hospitals posted a decrease in ED deaths.

The researchers noted staffing cuts may contribute to those deaths, and that operational changes in other departments might affect ED patients. “Notably, salary cuts in ICUs may reduce open ICU beds, leading to boarding of critically ill patients in the ED and increased ED transfers,” the study said. Before the private equity acquisition, the private equity hospitals did not greater financial distress or worse clinical performance, compared with the control hospitals.

The researchers noted “the implications of staffing on volume are important for access to care.”

“Our findings support concerns that staffing reductions may, on average, compromise the ability of a hospital to provide care, rather than provide the same care ‘more efficiently,’” the study said.

“Given the widespread use of cost cutting as a strategy, policymakers may consider evaluating and monitoring staffing levels in the years around such acquisitions,” the study said.

Private equity investment and acquisitions are not monolithic, and the sample may not represent other acquisitions, presenting a limitation on the study. Data involved traditional Medicare beneficiaries and may not generalize to other patients, the researchers said.