Getting Surgery? Here’s A Question To Ask The Hospital

Recently, I discussed an important question to ask your surgeon before agreeing to undergo a procedure. There’s another question you should ask, and it relates to the hospital where the surgery will be performed.

You need to ask whether a private equity firm owns the hospital. Here’s why.

Private equity firms have been acquiring hospitals and clinical practices for a decade now, transforming the practices in ways that will maximize profits. The firms achieve these profits, in part, by cutting costs. According to recent research, those cuts are turning deadly.

Consider common procedures like an appendectomy or hernia repair. Most such procedures happen without major complications. And when those rare complications occur, hospitals are generally quick to identify and address the problems. However, private equity owned hospitals are falling behind on identifying and addressing such complications, a phenomenon known as “failure to rescue.”

Here is a picture from a study led by Adrian Diaz from the University of Chicago. The researchers tracked 30-day mortality following common surgeries, and compared mortality rates for hospitals acquired, versus not acquired, by private equity firms. The trend is striking. Private equity ownership was associated with a significant increase in mortality (around 3-4%):

It is likely that such failures to rescue were the result of cuts in staffing, or reductions in other resources needed to monitor patients postoperatively.

In the U.S., clinical organizations are increasingly being purchased and run by for-profit entities, ones without any historical duty to promote patients’ best interests. We have allowed this without any significant pushback from physician organizations, the medical profession failing to guide its members about the morality of selling off their practices to financially driven institutions that potentially prioritize profits over high-quality care.

It would be nice to think that consumers/patients could solve this problem, by avoiding hospitals owned by private equity whenever they have the chance. If this happened, PE firms would eventually get out of the hospital-owning business.

But it won’t be easy for lay people, like you and me, to figure out who owns any given hospital. You could try to Google for the information, but results are often misleading because of the hidden, complex ownership structures that private equity firms use. Current AI tools aren’t up to the task yet, either, because they are not programmed to dive deeply into the tax forms and equity filings needed to make this determination.

So ask the surgeon, or someone else at the hospital, whether the facility is owned by a private equity firm.

Meanwhile, Congress should look more carefully at what happens to care when a hospital is owned by private equity and do more to make sure low quality hospitals are pushed to improve their care.