Compared with hospitals in a similar region, hospitals acquired by private equity firms saw their operating margins increase by nearly 2 percentage points.
However, private equity-acquired hospitals also were more likely to decrease staffing and shift focus from outpatient care, according to the March 20 HBR report.
The researchers were unable to conclude whether private equity acquisitions of hospitals led them to close prematurely.
“Our research on the net effects of PE activity in the hospital sector paints a mixed picture of its effects,” the researchers concluded. “Any policy reforms should therefore be guided by the available evidence specific to a particular sector and the principle that protecting patients from harm should always be the top priority.”
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