A new study published in Annals of Internal Medicine has found that private equity ownership of hospitals is associated with higher death rates among Medicare patients in emergency departments.
The findings add to a growing body of evidence suggesting that when private equity firms acquire healthcare facilities, patient outcomes often worsen while costs rise.
Fewer Staff, Lower Wages, and More Deaths
Researchers compared 49 hospitals acquired by private equity firms with 293 nonprofit and non-private equity-controlled hospitals.
The results were stark: private equity hospitals employed fewer staff, paid lower wages, and saw an average of seven additional deaths per 10,000 Medicare emergency department visits. Across the roughly one million emergency visits studied, this equated to about 700 excess deaths.
The study also found that emergency department salaries at private equity hospitals dropped by an average of 18.2%, while the number of full-time staff fell by 11.6%.
These reductions, experts warn, directly undermine the capacity of hospitals to respond effectively to emergencies.
The Human Toll of Cost Cutting
“Some patients in emergency departments come in critically ill, requiring all hands on deck to care for them,” said Dr. Zirui Song, associate professor of healthcare policy and medicine at Harvard Medical School and a co-author of the study.
“Conditions like trauma, respiratory failure, sepsis, heart attack, and stroke demand rapid, coordinated care.”
Song explained that cutting staff in departments serving Medicare patients is particularly dangerous. These patients are typically older, have multiple health conditions, and are more medically fragile than those with private insurance. “Reducing staff or lowering pay in this context can have serious consequences,” he said.
A Pattern Across the Healthcare Industry
This latest report is part of a larger pattern seen across healthcare sectors. Studies have linked private equity ownership to higher mortality rates in nursing homes, more post-surgical complications, and an increase in hospital-acquired infections and falls.
“Each of them sort of comes up with the same result,” said Martin Kenney, a professor at the University of California, Davis, and author of Private Equity and the Demise of the Local. “Private equity takes over things in the medical field—quality goes down, prices go up.”
The Department of Health and Human Services has also criticized private equity’s role in healthcare, citing growing evidence that profit-driven management practices harm patients.
Sicker Patients, More Transfers—and Worse Outcomes
The study also revealed that private equity-owned hospitals transfer 12% more emergency patients to other facilities compared to non-private equity hospitals. Those transferred patients often have multiple chronic conditions or require complex care.
“Sicker patients are transferred out because the first hospital lacks the bandwidth or resources to take care of them,” Song said.
Paradoxically, even after transferring out the most critically ill patients, private equity hospitals still recorded higher death rates. “That’s concerning,” Song noted, emphasizing that cost cutting in hospitals can sometimes go beyond efficiency measures and start to compromise safety.
Accountability Gaps Protect Investors
Despite mounting evidence, experts say meaningful policy changes to hold private equity firms accountable remain unlikely. “You don’t sue the private equity firm, because the private equity firm is insulated,” Kenney explained.
Lawsuits are typically filed against the hospitals themselves, not their parent firms. And when hospitals go bankrupt, he said, patients harmed by cost-cutting practices are often left with no recourse.
To change that, Kenney said, Congress would need to pass legislation holding private equity firms responsible for the actions of their portfolio companies—a move he views as politically improbable.
“Look at who owns our Congress and the executive branch too,” he said, pointing out that both Democratic and Republican lawmakers hold billions in private equity investments.
No Easy Choices for Patients
In most industries, consumers can avoid companies that prioritize profit over quality. But when it comes to medical emergencies, choice is limited. Patients rarely know who owns the hospital they enter—or what financial pressures shape its operations.
As private equity expands its reach across the healthcare system, experts warn that the cost of efficiency may be measured not in dollars, but in lives.
