Study Shows Serious Medical Errors Rose After Private Equity Firms Bought Hospitals

At The Gogel Law Firm, our St. Louis medical malpractice attorney focuses on the healthcare industry to ensure we can assist Missouri residents in pursuing claims against negligent providers who have caused them harm.

Over the last two decades, private equity firms have become significant players in healthcare, purchasing hospitals and a growing number of nursing homes, physician practices, and home healthcare companies. The firms pool money from institutional investors and individuals to form investment funds, often buying hospitals and other entities through high debt levels, to resell them years later.

A new study published last week by The Journal of the American Medical Association (JAMA) shows an increase in inpatient complications, including infections and falls. The new paper, which examines 51 hospitals between 2009 and 2019, provides new evidence that those changes may result in more dangerous patient conditions.

Medical Errors Law

What is the Correlation Between Medical Errors and Private Equity Firm Ownership?

JAMA found that three years after a private equity fund bought a hospital, adverse events, including surgical infections and bed sores, rose by 25% among Medicare patients compared to similar hospitals that such investors did not buy.

The researchers reported a nearly 38% increase in central line infections, a dangerous kind of infection that medical authorities say should never happen, and a 27% increase in falls by patients while staying in the hospital.

“This is a big deal because it’s the first piece of data that I think pretty strongly suggests that there is a quality problem when private equity takes over,” said Dr. Ashish Jha, the dean of the Brown University School of Public Health, who has also studied hospital safety extensively.

The researchers said the most likely explanation for the increased errors was fewer hospital employees, an effect measured in other private equity studies. “Reductions in staffing after acquisition could explain all of these findings.”

Recently, the industry itself has come under scrutiny.

This month, the Senate Budget Committee began a bipartisan investigation into private equity ownership of hospitals. Bills from several Congress members have pushed for more public reporting of private equity deals in healthcare and broader reforms on how the firms can acquire companies and earn profits.

Have You Been Injured While Undergoing Medical Care in Missouri?

If you have been injured or lost a loved one to negligence while undergoing medical care in Missouri, contact our St. Louis personal injury attorney today to review your case by calling (314) 370-8173 or online to schedule a free consultation. We can help you understand who can be held liable for your damages and pursue the negligent party — or combination of parties — on your behalf.

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