A screenshot of the cover of a January 2025 Senate Budget Committee Bipartisan Staff Report titled: Profits over patients: The harmful effects of private equity on the U.S. health care system.
As private equity firms continue to expand their presence in the healthcare sector, the need for transparency and accountability is more crucial than ever. Recent reports highlight the concerning ways these firms can negatively impact patient care, access to healthcare, and costs.
Patients Report Lower Satisfaction
A study published in the Journal of the American Medical Association (JAMA) found that hospitals acquired by private equity saw a decline in patient satisfaction scores. Researchers at Beth Israel Deaconess Medical Center compared scores from 73 private equity-acquired hospitals with 293 non-acquired hospitals. The results were alarming: patient satisfaction dropped as the time under private equity control increased.
The decline in satisfaction can be seen as a red flag, reflecting potential issues in care quality and patient safety. During the peak of the COVID-19 pandemic, hospitals nationwide experienced a 3.6% drop in patient satisfaction. The satisfaction deficit from private equity acquisition was comparable, reaching around 5% by the third year of ownership.
Senate Report: Profits Over Patients
The Senate Budget Committee released a bipartisan report titled “Profits Over Patients: The Harmful Effects of Private Equity on the U.S. Health Care System.” The investigation, based on over one million documents, revealed how private equity firms extract profits while neglecting patient care and safety.
The report highlighted two firms, Apollo Global Management and Leonard Green & Partners, scrutinizing their business practices. Key findings included increased debt burdens on hospitals, reduced quality of patient care, and in some cases, the closure of facilities. The report emphasizes that private equity’s profit-driven model may not align with the essential role hospitals play in public health.
HHS Secretary Warns of Industry Consolidation
Biden administration officials issued a report detailing the risks of ongoing consolidation in the healthcare sector. The Department of Health and Human Services (HHS) Secretary Xavier Becerra, in consultation with the Department of Justice and the Federal Trade Commission, highlighted concerns about increased costs, lower quality, and reduced access to healthcare.
The report calls for enhanced transparency, lower reporting thresholds for mergers and acquisitions, and strengthened collaboration among federal, state, and local agencies. Public dissatisfaction with the healthcare sector signals the need for immediate action to mitigate these risks.
Tips for Journalists
Journalists covering this topic can benefit from the following tips to guide their reporting:
- Don’t Rely on Congressional Action: Legislative attempts to address private equity’s influence, such as the Corporate Crimes Against Health Care Act and the Health Over Wealth Act, have stalled. With 60 votes needed in the Senate, these bills face significant obstacles.
- Monitor Antitrust Enforcement: Even as current antitrust enforcement is limited, the Biden administration has challenged several mergers and acquisitions. Future administrations may maintain this scrutiny, but many deals do not raise antitrust concerns.
- Investigate State Legislative Activity: The National Academy for State Health Policy offers model legislation to increase state oversight of health care transactions. Some states have specific regulations for private equity in healthcare, including Massachusetts and California.
- Look for Political Divides: Few conservative states are considering stronger oversight bills, potentially leading to disparities in health outcomes. Private equity’s influence is growing in red states, raising concerns about the impact on patient care.
- Engage Physicians: Many physicians are frustrated with losing control over their practices. The advocacy group Take Medicine Back seeks to outlaw the corporate practice of medicine. Physicians can offer critical insights and add depth to your reporting.
Resources
- JAMA Study on Patient Satisfaction
- Senate Budget Committee Report
- HHS Report on Consolidation
- Take Medicine Back Movement
The impact of private equity on healthcare cannot be ignored. By shining a light on the issues and engaging with stakeholders, journalists can contribute to a more informed public and potentially drive positive changes in policy.
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