When granny gets LBO’d

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Well this is interesting. Our colleague Chris Flood has passed us a paper published in the British Medical Journal earlier this month, which could (should) cause a ruckus.

The BMJ paper by Alexander Borsa, Geronimo Bejarano, Moriah Ellen and Joseph Dov Bruch examines and synthesises the findings of 55 peer-reviewed papers published over the past two decades on the impact of private equity ownership on healthcare — especially hospitals, nursing homes and medical practices like dental centres.

For obvious reasons, this is one of the more incendiary issues for an industry that a lot of people really hate attracts more than its fair share of controversy. The meta-analysis is cautiously damning. Here is the abstract:

Across the outcome measures, PE ownership was most consistently associated with increases in costs to patients or payers. Additionally, PE ownership was associated with mixed to harmful impacts on quality. These outcomes held in sensitivity analyses in which only studies with moderate risk of bias were included. Health outcomes showed both beneficial and harmful results, as did costs to operators, but the volume of studies for these outcomes was too low for conclusive interpretation. In some instances, PE ownership was associated with reduced nurse staffing levels or a shift towards lower nursing skill mix. No consistently beneficial impacts of PE ownership were identified.

The Harvard Business Review ran a similar study earlier this year. But this, rather non-committally, mostly argued that one shouldn’t frame “PE’s influence in healthcare as simply ‘good’ or ‘bad’”, said the picture was “mixed” and offered some vague policy suggestions.

The BMJ paper does stress that its studies were very US focused, so its findings might not hold everywhere, and highlighted the fact that the full effect of rising private equity ownership on a country’s health system might not yet be fully apparent in the data. Nevertheless, some politicians are likely to see their priors confirmed by the conclusion:

Trends in PE ownership rapidly increased across almost all healthcare settings studied. Such ownership is often associated with harmful impacts on costs to patients or payers and mixed to harmful impacts on quality . . . The current body of evidence is robust enough to confirm that PE ownership is a consequential and increasingly prominent element in healthcare, warranting surveillance, reporting, and possibly increased regulation.