New Research Chronicles Impact of Private Equity’s Health Care Takeover

Health care operators such as hospitals or providers that are owned by private equity companies often have higher costs for payers and patients, according to a systematic review of research studies that was published on July 19 in BMJ. Alexander Borsa, one of the review’s authors, tells AIS Health, a division of MMIT, that the increased costs are primarily due to the groups’ rate negotiating skills as well as the trend of private equity companies looking to consolidate clinical practices, leading to less competition in certain markets. 

The researchers also found that private equity ownership was associated with mixed to harmful impacts on health care quality, while they noted there were not enough studies to make conclusions about private equity ownership’s effect on health outcomes and costs to operators.  

They wrote, though, that “no consistently beneficial impacts of [private equity] were identified” in the studies they examined.