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Private equity’s role in health care is under increasing scrutiny

Samantha Fields Apr 8, 2024
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"About 25% of emergency room departments are staffed by private equity-owned physician companies," said Sabrina Howell of NYU’s Stern School of Business. Spencer Platt/Getty Images

Private equity’s role in health care is under increasing scrutiny

Samantha Fields Apr 8, 2024
Heard on:
"About 25% of emergency room departments are staffed by private equity-owned physician companies," said Sabrina Howell of NYU’s Stern School of Business. Spencer Platt/Getty Images
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COPY

These days, if you end up in an emergency room, there’s a good chance it may be owned or staffed by a private equity firm — and that’s getting the attention of federal officials.  

There’s currently a joint Federal Trade Commission-Department of Justice-Department of Health and Human Services inquiry into how private equity’s ownership of hospitals and physician staffing companies is affecting health care.

Separately, a Senate committee recently sent letters to several private equity firms that own or staff hospital emergency rooms asking them to provide information on staffing decisions, patient care and safety, and more.

“Private equity ownership has grown dramatically in recent decades,” said Sabrina Howell with NYU’s Stern School of Business. “About 25% of emergency room departments are staffed by private equity-owned physician companies.”

That’s more than double what it was just 10 or 15 years ago, according to Loren Adler, a fellow and associate director at the Center on Health Policy at Brookings.

And it’s raising a number of concerns, including how private equity’s focus on maximizing profits is affecting health care costs, staffing levels and patient safety.

“There is pretty clear evidence that these companies do increase prices for patients and consumers,” Adler said. “But the key questions here are really what is this doing to the quality of care?”

So far, he said there’s no clear answer yet. But it’s a big part of what these federal inquiries are trying to figure out.  

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