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Financial Impacts And Operational Implications Of Private Equity Acquisition Of US Hospitals.
Cerullo, Marcelo; Lin, Yu-Li; Rauh-Hain, Jose Alejandro; Ho, Vivian; Offodile, Anaeze C.
  • Cerullo M; Marcelo Cerullo, Duke University Hospital, Durham, North Carolina.
  • Lin YL; Yu-Li Lin, University of Texas MD Anderson Cancer Center, Houston, Texas.
  • Rauh-Hain JA; Jose Alejandro Rauh-Hain, University of Texas MD Anderson Cancer Center.
  • Ho V; Vivian Ho, Rice University and Baylor College of Medicine, Houston, Texas.
  • Offodile AC; Anaeze C. Offodile II (acoffodile@mdanderson.org), University of Texas MD Anderson Cancer Center and Rice University.
Health Aff (Millwood) ; 41(4): 523-530, 2022 04.
Article in English | MEDLINE | ID: covidwho-1775464
ABSTRACT
Although private equity acquisition of short-term acute care hospitals purportedly improves efficiency and cost-effectiveness, financial performance after acquisition remains unexamined. We compared changes in the financial performance of 176 hospitals acquired during 2005-14 versus changes in matched control hospitals. Acquisition was associated with a $432 decrease in cost per adjusted discharge and a 1.78-percentage-point increase in operating margin. The majority of acquisitions-134 members of the Hospital Corporation of America, acquired in 2006-were associated with a $559 decrease in cost per adjusted discharge but no change in operating margin. Conversely, non-HCA hospitals exhibited a 3.27-percentage-point increase in operating margin without a concomitant change in cost per adjusted discharge. When we examined markers of hospital capacity, operational efficiency, and costs, we found that private equity acquisition was associated with decreases in total beds, ratio of outpatient to inpatient charges, and staffing (total personnel and nursing full-time equivalents and total full-time equivalents per occupied bed). Therefore, financial performance improved after acquisition, whereas patient throughput and inpatient utilization increased and staffing metrics decreased. Future research is needed to identify any unintended trade-offs with safety and quality.
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Full text: Available Collection: International databases Database: MEDLINE Main subject: Hospitals Type of study: Experimental Studies Limits: Humans Language: English Journal: Health Aff (Millwood) Year: 2022 Document Type: Article

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Full text: Available Collection: International databases Database: MEDLINE Main subject: Hospitals Type of study: Experimental Studies Limits: Humans Language: English Journal: Health Aff (Millwood) Year: 2022 Document Type: Article