The increasing prevalence of private equity (PE) acquisitions in healthcare leads many to question the impact of this type of arrangement on patient care and safety. PE firms continue to acquire medical practices, hospitals, nursing homes, and other healthcare entities across multiple specialties like primary care, oncology, and behavioral health. In 2024, 80 percent of physicians were employed by a hospital system or corporation, up from 60 percent in 2019, and private equity owned at least 386 hospitals—or roughly 30 percent of all for-profit hospitals in the United States. Today, nearly a quarter of U.S. hospitals are run by for-profit entities that offer business expertise and infuse capital for healthcare organizations.1,2 And while patients may be unaware of specific changes in the care they receive at their PE-acquired healthcare facility, PE investors do have specific financial goals that could affect care decisions.3 There is the suggestion of a “core contradiction” that exists as physicians believe patients come first while corporate investors may believe that equity to shareholders is the priority, focusing on rapid growth and high returns when they sell within three to seven years.
Growing research suggests healthcare quality declines when for-profit initiatives take control. Reports from the failed Steward Health Care System, for example, revealed compromised patient safety resulting from understaffed emergency rooms and ill-equipped maternity units to cancelled surgeries. A 2023 study reported that Medicare patients receiving care at PE-owned hospitals suffered a 25 percent increase in hospital-acquired complications compared to patients at nonprofit hospitals. These included a 38 percent increase in bloodstream infections from central line placement procedures despite 16 percent fewer central lines placed. Lastly, the rate of surgical site infections doubled at PE hospitals while those at control hospitals decreased. Patient falls at non-PE-owned hospitals have been trending downward for decades due to longstanding hospital patient safety initiatives. However, falls at PE-owned hospitals have experienced a 27 percent relative increase, as reported by the 2023 study.
According to Zirui Song, PhD, an associate professor at Harvard Medical School and Massachusetts General Hospital, the unique financial pressures private equity-owned hospitals face may contribute to cost-cutting in care delivery. While other industries allow for the replacement of workers with automation, healthcare remains human labor intensive, especially in the acute care setting. In some instances, for example, PE ownership was associated with reduced nurse staffing levels. A reduction of staff and other related measures in the name of “efficiency” can have deleterious consequences for patient outcomes and overall quality of care, which includes safety.1
Recent studies of nursing home patient data focused on mortality, greater use of anti-psychotic medications, and increases in emergency department visits and hospitalizations in PE-owned facilities and physician practices, coupled with increased costs and Medicare claims. While patient safety data on PE-owned physician practices is limited, some information can be found in academic studies and whistle blower lawsuits.Additionally, research of both private equity–owned dermatology and cardiology practices identified “almost exclusively negative impacts on patient satisfaction, daily functioning, and general quality scores.”4,5
Another important aspect to consider is the impact of the PE arrangement on the physicians who are providing the care. Information from False Claims Act lawsuits found concerns over the exertion of control by PE firms over physician decisions, including hiring and firing. A PE firm may require providers to see a greater number of patients per day and order more (potentially unnecessary) tests and procedures. Physicians may experience a decrease in autonomy, with reduced hours and benefits, and replacement with less-expensive, mid-level providers. Along with this, naturally, comes a decreased satisfaction with work and a greater risk of physician burnout.5,6
Academic and research institutions have made clear there is a need for attention and robust action from policymakers to address these accelerating acquisitions. A lot remains uncertain, and additional efforts such as stronger congressional oversight may be required to better comprehend the many implications of PE on patient care and safety. Within the last year, several congressional committees have launched investigations and held hearings on the role of PE in healthcare. State legislation to regulate private equity in healthcare is pending in several states including Massachusetts and New York, while other states such as California, Oregon, and Minnesota already have programs in place. Other bills, like the Corporate Crimes Against Health Care Act7 and the Health Over Wealth Act8, are aimed at penalizing PE firms in the event of patient death or injury, and providing greater transparency for both PE and for-profit companies that own healthcare entities.1
Resources
1. Harvard T.H. Chan School of Public Health https://hsph.harvard.edu/news/private-equitys-appetite-for-hospitals-may-put-patients-at-risk/
2. National Institutes of Health (The Journal of the Missouri State Medical Association) https://pmc.ncbi.nlm.nih.gov/articles/PMC11482842/
3. The University of Chicago Medicine https://www.uchicagomedicine.org/forefront/research-and-discoveries-articles/private-equity-investments-in-healthcare-may-not-lower-costs
4. National Institutes of Health (The BMJ) https://pmc.ncbi.nlm.nih.gov/articles/PMC10354830/
5. National Institutes of Health (Clinical Orthopaedics and Related Research) https://pmc.ncbi.nlm.nih.gov/articles/PMC11124759/
6. Brown University School of Public Health https://sph.brown.edu/news/2025-04-10/private-equity-acquisitions-health-care-industry
7. Congress Bill S.4503 https://www.congress.gov/bill/118th-congress/senate-bill/4503
8. Congress Bill S.4804 https://www.congress.gov/bill/118th-congress/senate-bill/4804