Private equity hospitals

Recent studies published in JAMA reveal that private equity firms often acquire already successful hospitals but subsequently strip their assets, leading to a decline in resources available for patient care. The research indicates a significant average asset loss of 15% in acquired hospitals within two years, compared to a 9.2% asset increase in non-acquired facilities. This equates to a loss of approximately $28 million per hospital, raising concerns about the long-term implications for patient care quality. Additionally, the findings suggest that private equity firms tend to target financially stable hospitals rather than struggling ones, contradicting industry claims of investment in distressed facilities. The Federal Trade Commission is currently investigating the financial practices of these firms in healthcare, highlighting the ongoing scrutiny of their impact on hospital operations and patient care. Critics argue that the asset liquidation tactics employed by private equity firms may prioritize investor profits over the healthcare needs of communities.