If you’ve invested in a private equity firm, you want it to be profitable. These profits often result from cutting costs at businesses these firms acquire. That means laying off staff, paying as little as possible in expenses and holding on to equipment that should be replaced – just to name a few things – in addition to increasing what they charge.
These measures may be good for the bottom line, but when the business at the center of it is a hospital, safety and lives can be endangered. Studies have found that the rates of preventable adverse events (including central line infections, falls and bedsores) rose, on average, 25% when a private equity firm acquired a hospital.
The effect on fatality rates in emergency departments
Another recent study out of Harvard focused on emergency departments (EDs) at hospitals acquired by private equity firms. The results are troubling, to say the least. Researchers analyzed data from a million ED visits over a decade to nearly 50 hospitals acquired by these firms. They found that fatality rates were 13% higher than in comparable facilities that weren’t owned by private equity firms.
The Harvard researchers linked these fatalities to a lack of adequate staff and other factors related to cost-cutting measures. They found a drop in the number of full-time employees and in how much the hospitals invested in emergency and intensive care after the acquisitions. Staffing cuts and other cost-cutting measures (particularly a drop in staffing levels) were highlighted in the other studies as well.
Lack of staffing is no defense for negligence or malpractice
It’s not always easy for patients to determine whether a private equity firm owns a hospital in which they’ll be receiving care. Ownership by private equity firms can be especially difficult to recognize. However, it’s important to note that private equity firms have invested approximately $1 trillion in health care companies (including nursing homes).
In an emergency, no one’s thinking about that anyway. People often have no choice in where they go for emergency care. Anyone who suffers harm or loses a loved one in a hospital has the right to ask questions if they believe that someone acted negligently or made a preventable error. Improper staffing is no defense to a medical malpractice claim. Getting experienced legal guidance is a good first step in determining whether you have a case.