Private Equity Ownership Research Articles

Private Equity, Value-Based Payments, and Hollow Promises

As private equity (PE) investors have moved into nearly every sector of the health care system, there is growing debate about the financial industry’s role and its impact. In recent years, a number of media stories have exposed seriously concerning behavior of PE-owned health care facilities and companies (O’Grady, 2022; Pomorski, 2021; Sanger-Katz et al., 2019). Critics also point to recent empirical studies documenting rising prices and reductions in quality under PE-backed healthcare companies. For example, a 2021 report documents how PE-backed mergers and acquisitions have contributed to the stark rise in consolidation and increasing prices, especially in the last decade (Scheffler et al., 2021). Evidence documenting reductions in quality-of-care point to PE-backed nursing homes (Gupta et al., 2021), physician management firms related to surprise billing (Cooper et al., 2018), and PE-backed hospitals (Bruch et al., 2021). This is likely because PE began investing in the nursing home and hospital systems in the early 2000s, allowing for sufficient data to now rigorously study the effect of PE ownership.

Private Equity and Your Doctor: Profits Before Patients

Older Americans have unique health needs that require specialized care and support. As people age, they are more likely to develop multiple chronic conditions such as cancer, diabetes, heart disease, and arthritis, which can greatly affect their quality of life (Boyd et al., 2019). Additionally, older adults may also experience physical and cognitive declines, which can make it difficult for them to manage their own healthcare. Access to healthcare and supportive services is crucial for older Americans to maintain their health and independence. Services such as home healthcare, nursing homes, and hospice care play a vital role in helping older adults lead fulfilling lives and maintain their quality of life for as long as possible. The majority of hospice patients are diagnosed with one or more chronic conditions, with cancer being the most common (29.6%), followed by circulatory or heart disease (17.4%) and dementia (15.6%) (Hospice Facts & Figures, 2020). Meanwhile, as the American population of persons aged 65 years and over will soon outnumber those under 18 year of age, there are concerns about the quality of care for older Americans as the healthcare industry shifts towards private equity (PE) ownership (Braun, Stevenson, et al., 2021).

MP21-15 PRIVATE EQUITY FAVORS UROLOGY PRACTICES IN AFFLUENT AND LESS DIVERSE NEIGHBORHOODS

You have accessJournal of UrologyCME1 Apr 2023MP21-15 PRIVATE EQUITY FAVORS UROLOGY PRACTICES IN AFFLUENT AND LESS DIVERSE NEIGHBORHOODS Stephen Kisty, Michael Stencel, Alex Watts, Bruce Jacobs, and Benjamin Davies Stephen KistyStephen Kisty More articles by this author , Michael StencelMichael Stencel More articles by this author , Alex WattsAlex Watts More articles by this author , Bruce JacobsBruce Jacobs More articles by this author , and Benjamin DaviesBenjamin Davies More articles by this author View All Author Informationhttps://doi.org/10.1097/JU.0000000000003246.15AboutPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareFacebookLinked InTwitterEmail Abstract INTRODUCTION AND OBJECTIVE: Private equity involvement in healthcare has increased rapidly over the past 20 years, but the first urology practice was not acquired until 2016. After acquisition of a medical practice, private equity firms commonly deploy a “buy and build” model where they increase revenue and decrease costs to grow practice valuation before selling the practice within 5-7 years to a larger private equity firm. This study aimed to describe the private equity-ownership in urology practices and identify key characteristics of the populations these clinics serve. METHODS: We identified private equity-owned urology practices from February 25, 2022 through May 31, 2022. Practice acquisition was confirmed by cross referencing news releases, platform websites, and Pitchbook (a comprehensive market data warehouse). Population-level data was obtained from the U.S. Census website for each zip code tabulation area (ZCTA) within each county that had at least 1 private equity-owned urology clinic. Zip codes were converted to ZCTAs for analysis using a crosswalk. Zip codes containing private equity-backed urology clinics were compared to zip codes that did not contain a private equity-backed urology clinic but were in the same county. Data was analyzed using one-way ANOVA, and Chi-squared tests of significance. RESULTS: As of June 2022, 7 private equity platforms operate 387 urology clinics in 18 states, across 100 unique counties and employ 731 urologists. Zip codes that contained private equity-backed urology clinics (n=316) had higher rates of residents with a bachelor’s degree or higher, higher median family incomes, more white and less African American and Hispanic residents, and a greater proportion of privately insured residents than zip codes that did not contain a private equity-owned urology clinic (n=3,145, Table 1). These differences were universally amplified in zip codes that had higher concentration of PE-owned clinics (2 ≤ private equity-owned urology clinics). CONCLUSIONS: Private equity ownership in urology has grown significantly since the first acquisition and is concentrated in areas of higher socio-economic status and less racial diversity. If there are quality benchmarks that are improved by private equity acquisition, those benefits are being disproportionally directed at wealthy and largely white communities thus far. Source of Funding: NIH/NIDDK University of Pittsburgh O'Brien Cooperative Research Center Program (U54 DK112079) © 2023 by American Urological Association Education and Research, Inc.FiguresReferencesRelatedDetails Volume 209Issue Supplement 4April 2023Page: e291 Advertisement Copyright & Permissions© 2023 by American Urological Association Education and Research, Inc.MetricsAuthor Information Stephen Kisty More articles by this author Michael Stencel More articles by this author Alex Watts More articles by this author Bruce Jacobs More articles by this author Benjamin Davies More articles by this author Expand All Advertisement PDF downloadLoading ...

MP19-02 IMPACT OF PRIVATE EQUITY ACQUISITION ON UROLOGIC PROCEDURAL VOLUME

You have accessJournal of UrologyCME1 Apr 2023MP19-02 IMPACT OF PRIVATE EQUITY ACQUISITION ON UROLOGIC PROCEDURAL VOLUME Shyam Patnaik, Danielle Sharbaugh, Michael Stencel, Cameron Jones, Stephen Kisty, Divya Nateson, Charlotte Stahlfeld, Sarah Erpenbeck, Cailey Guercio, Mia Alcorn, Jonathan Yabes, Bruce Jacobs, and Benjamin Davies Shyam PatnaikShyam Patnaik More articles by this author , Danielle SharbaughDanielle Sharbaugh More articles by this author , Michael StencelMichael Stencel More articles by this author , Cameron JonesCameron Jones More articles by this author , Stephen KistyStephen Kisty More articles by this author , Divya NatesonDivya Nateson More articles by this author , Charlotte StahlfeldCharlotte Stahlfeld More articles by this author , Sarah ErpenbeckSarah Erpenbeck More articles by this author , Cailey GuercioCailey Guercio More articles by this author , Mia AlcornMia Alcorn More articles by this author , Jonathan YabesJonathan Yabes More articles by this author , Bruce JacobsBruce Jacobs More articles by this author , and Benjamin DaviesBenjamin Davies More articles by this author View All Author Informationhttps://doi.org/10.1097/JU.0000000000003244.02AboutPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareFacebookLinked InTwitterEmail Abstract INTRODUCTION AND OBJECTIVE: Private equity firms have been increasing investment in urology in recent years. Despite the changing ownership model in urology private practice, the effect of these acquisitions on urologic practice and procedural volume has yet to be determined. We sought to investigate the impact on procedural volume in a variety of urologic procedures before and after private equity acquisition. METHODS: Private equity acquisitions of urology practices were identified via the existing literature, which utilized a compilation of financial databases cataloguing both public and private transactions. Yearly office visit and procedure volume by provider was extracted from the publicly available “Medicare Physician & Other Practitioners by Provider and Service” dataset from 2013-2019. The most commonly billed procedures were chosen for analysis: post-void residual (PVR), cystometrogram (CMG), uroflow, cystoscopy, prostate biopsy, extracorporeal shock-wave lithotripsy (ESWL), and ureteroscopy. Mixed regression model and sensitivity analyses were conducted. RESULTS: 1,564,853 office visits and 867,216 procedures were analyzed over a 5-year period. Using mixed model analysis, the number of cystoscopies, PVRs, ESWL, and ureteroscopies per physician-year showed no statistically significant change after private equity acquisition (Table 1). Prostate biopsy and complex CMG showed statistically significant increases by an average of 2.06 and 6.88 procedures per physician-year respectively after private equity. Complex uroflow had a significant decrease by an average of 13.5 procedures per physician-year after acquisition. The average number of each urologic procedure per 100 visits remained stable from before private equity acquisition to after acquisition. In terms of the average number of new patient visits, the observed trends for 30-, 45-, and 60- minute visits per 100 visits remained stable from before to after private equity acquisition. CONCLUSIONS: In this study we demonstrate the impact of private equity ownership on urologic practices before and after acquisition. We found that both prostate biopsy and complex CMG procedures rates increased significantly since private equity acquisition. The fiscal impact of these changes has yet to be determined. Source of Funding: N/A © 2023 by American Urological Association Education and Research, Inc.FiguresReferencesRelatedDetails Volume 209Issue Supplement 4April 2023Page: e264 Advertisement Copyright & Permissions© 2023 by American Urological Association Education and Research, Inc.MetricsAuthor Information Shyam Patnaik More articles by this author Danielle Sharbaugh More articles by this author Michael Stencel More articles by this author Cameron Jones More articles by this author Stephen Kisty More articles by this author Divya Nateson More articles by this author Charlotte Stahlfeld More articles by this author Sarah Erpenbeck More articles by this author Cailey Guercio More articles by this author Mia Alcorn More articles by this author Jonathan Yabes More articles by this author Bruce Jacobs More articles by this author Benjamin Davies More articles by this author Expand All Advertisement PDF downloadLoading ...

247 Private equity acquisition of nursing homes and the impact on long stay residents and racial disparities in care outcomes

OBJECTIVES/GOALS: To investigate nursing homes (NHs) acquired by private equity (PE) firms and estimate the effect of PE NH acquisitions on NH care quality for NH residents and whether PE NH acquisitions exacerbate racial inequities in quality of care. METHODS/STUDY POPULATION: My research estimates the causal effect of NH PE acquisitions on NH access and quality of care for NH residents and whether acquisitions exacerbate racial disparities in NH care for about 115 PE-owned NHs in the US, measuring the quality of care at the facility survey year level, and using an array of NH-level data sources. I identified 115 PE-owned NHs (treatment group) and 665 non-PE-owned NHs between 2003 and 2010, using the Online Survey Certification and Reporting database to obtain facility characteristics. I compare facility characteristics (e.g., payer mix, staffing levels, and quality measures such as pressure ulcers, unexpected weight loss, acuity, and health deficiencies). I will then test whether effects differ by race, with hypotheses informed by Public Health Critical Race Praxis approach. RESULTS/ANTICIPATED RESULTS: Preliminary results show that staffing levels differ between PE and non-PE-owned NHs in a way that aligns with a shift in focus toward the Medicare population i.e. short stays. We also find that deficiencies increased in PE-owned NHs compared to non-PE-owned NHs. We expect that PE acquisitions may lead to slightly widening racial disparities in NH care quality. Results may show that PE-owned NHs have a higher share of low-rated, high-BIPOC facilities. In weak markets, PE-owned NHs may have a higher share of BIPOC residents compared to highly competitive markets. This is because PE managers may prioritize cost over quality by cutting services. However, since quality measures are self-reported, except for measures related to deficiencies, this predicted lower quality of care may not be evident in observed data. DISCUSSION/SIGNIFICANCE: Understanding how PE ownership impacts nursing home care quality for long-stay residents, especially those funded by Medicaid, can help develop intervention strategies to effectively mitigate racial inequities in NH care, as Medicaid funded NH residents are more likely to be Black, Indigenous, and people of color.

Decentralized investing: A social innovation for broader patient engagement

Despite the substantial increase in private equity ownership, proliferation of for-profit business models, and consolidation across healthcare organizations over the past decade, healthcare delivery continues to be characterized by poor patient-centricity and financial structures that incentivize care fragmentation. We present a novel framework in which healthcare systems engage patients to participate in a decentralized, public form of healthcare investment and, consequently, advise on decisions relating to healthcare delivery, education, research, and policy. We posit that patient-led unions, informed by healthcare experts and regional governments to ensure feasibility and regulatory compliance, are uniquely poised to create value per service-dominant logic and transform healthcare delivery. Patient-led unions have the potential to offer lower costs, better outcomes, and improved patient experience compared to for-profit, private equity models. Amid growing calls for a civil rights style-movement in healthcare to address longstanding disparities and inefficiencies in the system, decentralized patient investment can empower patients to advance effective and equitable population health.

Private Equity Looting of U.S. Health Care: An Under-Recognized and Uncontrolled Scourge.

Private equity investments in U.S. health care have become very common across more parts of our health care system than most physicians and other health professionals realize. The motivation in every case is to reap short-term profits for investors regardless of the consequences on patient care. These investments range from hospitals, emergency room services, and outpatient facilities to nursing homes and home care. Physician practices have been bought and sold in a number of specialties, including anesthesiology, dermatology, emergency medicine, gastroenterology, obstetrics-gynecology, ophthalmology, orthopedic surgery, and radiology. After leveraged buyouts using borrowed money, the typical modus operandi of private equity is to load the acquired asset with debt, cut costs as a way to increase revenues, press for unnecessary procedures, then sell the asset typically in three to five years. This article describes that process, including the harmful impacts of private equity on health care, and summarizes what is being done to rein in the exploitive practices of private equity ownership.

Private equity ownership of ophthalmology practices: how does it impact clinical research?

To explore the impact of private equity ownership of ophthalmology practices on the success of their clinical research programs. Private equity partnership in the clinical research space has been steadily occurring over the past decades. In addition to contract research organizations, private equity groups have also consolidated multiple independent clinical research networks. By investing in an increasing number of retina practices, one private equity group is attempting to create a synergistic relationship between clinical practice and clinical research with the goal of supporting a larger, more robust clinical research network. Although there are physician concerns about the potential deleterious effects of private equity ownership on clinical research capabilities, private equity support has the potential to be an important stimulus for clinical research growth. http://links.lww.com/COOP/A48.

Local Journalism Under Private Equity Ownership

Local Journalism Under Private Equity Ownership

Surgical Dermatology and Private Equity: A Review of the Literature and Discussion.

While there has been substantial investment in dermatology by private equity (PE), the relevance of this trend to the dermatologic surgeon has not been assessed. The literature on PE investment in medicine was reviewed to provide interdisciplinary data relevant to the dermatologic surgeon. The PubMed database was queried for all peer-reviewed articles containing the term "private equity" and identified 70 unique articles across 18 medical specialties, comprising 20 original research articles and 50 commentary articles. Significant PE growth across multiple medical specialties occurred in the 2010s. Private equity ownership was associated with higher levels of nonphysician providers relative to physicians. Pooled data suggest that PE ownership is associated with lower staffing levels, particularly for non-revenue-generating staff, as well as potentially lower levels of medical supplies on hand. Data on financial performance suggests that PE-ownership results in higher profits, revenues, and costs. Surveys of physicians demonstrate concern about autonomy, ethics, and career prospects. For the dermatologic surgeon, issues related to consolidation, provider scope of practice, support staff availability, and supply management are important due to the nature of procedural intervention and the increased risk of adverse events.

Toward a Preliminary Theory of Organizational Incentives: Addressing Incentive Misalignment in Private Equity-Owned Long-Term Care Facilities.

The COVID-19 pandemic brought critical debates regarding private equity ownership of long-term care facilities to the forefront of political, legal, and social landscapes. Like many of the historical concerns about long-term care, these debates center around low quality patient care. While the concerns present important challenges to overcome, this note theorizes the kinds of organizational incentives that may provide opportunities to align patient quality care with the financial goals of private equity investing. After a discussion of the historical context of long term care facilities and the more recent trends towards for-profit and private equity ownership of these facilities (Parts II and III), I engage with value-based models as a starting point to consider organizational level incentive possibilities (Part IV). In Part V, I consider an organizational-level pay for performance model, a time-bound incentive structure, and investor-specific incentives as three distinct possibilities for addressing the patient care issues identified.

Private Equity in Anesthesia: Background and Long-Term Implications

Features| September 2021 Private Equity in Anesthesia: Background and Long-Term Implications George Tewfik, MD, MBA, CPE; George Tewfik, MD, MBA, CPE Search for other works by this author on: This Site PubMed Google Scholar Richard P. Dutton, MD, MBA Richard P. Dutton, MD, MBA Search for other works by this author on: This Site PubMed Google Scholar ASA Monitor September 2021, Vol. 85, 29–31. https://doi.org/10.1097/01.ASM.0000791616.65509.57 Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Share Icon Share Twitter LinkedIn Cite Icon Cite Get Permissions Search Site Citation George Tewfik, Richard P. Dutton; Private Equity in Anesthesia: Background and Long-Term Implications. ASA Monitor 2021; 85:29–31 doi: https://doi.org/10.1097/01.ASM.0000791616.65509.57 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu nav search search input Search input auto suggest search filter All ContentAll PublicationsASA Monitor Search Advanced Search Topics: equity, investments Gordon Gekko, the brilliant but ruthless corporate titan at the center of Oliver Stone's 1987 film “Wall Street,” was a private equity investor, whose tactics earned him millions in the cutthroat world of mergers and acquisitions. The classic quote was “Greed is Good!” But is it? The answer matters because private equity ownership of anesthesia groups has been a reality for decades, with increasing prominence in recent years. A recent editorial in the New England Journal of Medicine discussed the expanding role of private equity in acquiring physician practices (N Engl J Med 2021;384:981-3). Private equity (PE) firms use capital sourced from pension funds, sovereign wealth funds, high net-worth individuals, and endowments to invest in promising businesses. PE investors typically seek a return of at least 20% to offset the risks involved, as future growth cannot be predicted with 100% accuracy (Ann Intern Med 2019;171:78). Investment... You do not currently have access to this content.

Ethical and Professionalism Implications of Physician Employment and Health Care Business Practices: A Policy Paper From the American College of Physicians.

The environment in which physicians practice and patients receive care continues to change. Increasing employment of physicians, changing practice models, new regulatory requirements, and market dynamics all affect medical practice; some changes may also place greater emphasis on the business of medicine. Fundamental ethical principles and professional values about the patient-physician relationship, the primacy of patient welfare over self-interest, and the role of medicine as a moral community and learned profession need to be applied to the changing environment, and physicians must consider the effect the practice environment has on their ethical and professional responsibilities. Recognizing that all health care delivery arrangements come with advantages, disadvantages, and salient questions for ethics and professionalism, this American College of Physicians policy paper examines the ethical implications of issues that are particularly relevant today, including incentives in the shift to value-based care, physician contract clauses that affect care, private equity ownership, clinical priority setting, and physician leadership. Physicians should take the lead in helping to ensure that relationships and practices are structured to explicitly recognize and support the commitments of the physician and the profession of medicine to patients and patient care.

Insurance Acceptance, Appointment Wait Time, and Dermatologist Access Across Practice Types in the US

In the 15 years since dermatology access was last investigated on a national scale, the practice landscape has changed with the rise of private equity (PE) investment and increased use of nonphysician clinicians (NPCs). To determine appointment success and wait times for patients with various insurance types at clinics with and without PE ownership. In this study, PE-owned US clinics were randomly selected and matched with 2 geographically proximate clinics without PE ownership. Researchers called each clinic 3 times over a 5-day period to assess appointment/clinician availability for a fictitious patient with a new and changing mole. The 3 calls differed by insurance type specified, which were Blue Cross Blue Shield (BCBS) preferred provider organization, Medicare, or Medicaid. Appointment success and wait times among insurance types and between PE-owned clinics and control clinics. Secondary outcomes were the provision of accurate referrals to other clinics when appointments were denied and clinician and next-day appointment availability. A total of 1833 calls were made to 204 PE-owned and 407 control clinics without PE ownership across 28 states. Overall appointment success rates for BCBS, Medicare, and Medicaid were 96%, 94%, and 17%, respectively. Acceptance of BCBS (98.5%; 95% CI, 96%-99%; P = .03) and Medicare (97.5%; 95% CI, 94%-99%; P = .02) were slightly higher at PE-owned clinics (compared with 94.6% [95% CI, 92%-96%] and 92.8% [95% CI, 90%-95%], respectively, at control clinics). Wait times (median days, interquartile range [IQR]) were similar for patients with BCBS (7 days; IQR, 2-22 days) and Medicare (7 days; IQR, 2-25 days; P > .99), whereas Medicaid patients waited significantly longer (13 days; IQR, 4-33 days; P = .002). Clinic ownership did not significantly affect wait times. Private equity-owned clinics were more likely than controls to offer a new patient appointment with an NPC (80% vs 63%; P = .001) and to not have an opening with a dermatologist (16% vs 6%; P < .001). Next-day appointment availability was greater at PE-owned clinics than controls (30% vs 21%; P = .001). Patients with Medicaid had significantly lower success in obtaining appointments and significantly longer wait times regardless of clinic ownership. Although the use of dermatologists and NPCs was similar regardless of clinic ownership, PE-owned clinics were more likely than controls to offer new patient appointments with NPCs.

Local Journalism under Private Equity Ownership

Local daily newspapers have historically played an important role in U.S. democracy by providing citizens with information about local policy issues. However, in recent decades local newspapers have struggled to compete with new online platforms for readers’ attention. Private equity investors—who specialize in reorganizing struggling firms in distressed sectors—have entered the industry. How do these new owners affect newspaper content, survival, and local civic engagement? We document nuanced effects, contrasting with the polarized debate on this topic in the media and political discourse. On one hand, we find that private equity ownership leads to higher digital circulation and lower chances of newspaper exit. On the other hand, we document a change in news composition away from information about local governance, and lower employment of reporters and editors. Finally, we find declines in participation in local elections, consistent with local newspaper content being relevant for civic engagement. The results have implications for knowledge about local policy issues and highlight trade-offs surrounding media ownership.

Private equity buyouts, credit constraints, and firm exports

We analyse the impact of private equity buyouts on firm exports, on a panel of UK non-financial firms over 2004--2017. Using difference-in-differences estimations, we show that private equity ownership increases the probability of exporting, the value of exports, and the export to sales ratio. We further show that the positive impact of private equity ownership on exports holds only after private-to-private buyouts, or acquisitions of small or young target firms. Our findings suggest that private equity investors mitigate the credit constraints faced by their portfolio companies, hence boosting their exports.

Comparative Performance of Private Equity–Owned US Nursing Homes During the COVID-19 Pandemic

It is not known whether nursing homes with private equity (PE) ownership have performed better or worse than other nursing homes during the coronavirus disease 2019 (COVID-19) pandemic. To evaluate the comparative performance of PE-owned nursing homes on COVID-19 outcomes. This cross-sectional study of 11 470 US nursing homes used the Nursing Home COVID-19 Public File from May 17, 2020, to July 2, 2020, to compare outcomes of PE-owned nursing homes with for-profit, nonprofit, and government-owned homes, adjusting for facility characteristics. Nursing home ownership status. Self-reported number of COVID-19 cases and deaths and deaths by any cause per 1000 residents; possessing 1-week supplies of personal protective equipment (PPE); staffing shortages. Of 11 470 nursing homes, 7793 (67.9%) were for-profit; 2523 (22.0%), nonprofit; 511 (5.3%), government-owned; and 543 (4.7%), PE-owned; with mean (SD) COVID-19 cases per 1000 residents of 88.3 [2.1], 67.0 [3.8], 39.8 [7.6] and 110.8 [8.1], respectively. Mean (SD) COVID-19 deaths per 1000 residents were 61.9 [1.6], 66.4 [3.0], 56.2 [7.3], and 78.9 [5.9], respectively; mean deaths by any cause per 1000 residents were 78.1 [1.3], 91.5 [2.2], 67.6 [4.5], and 87.9 [4.8], respectively. In adjusted analyses, government-owned homes had 35.5 (95% CI, -69.2 to -1.8; P = .03) fewer COVID-19 cases per 1000 residents than PE-owned nursing homes. Cases in PE-owned nursing homes were not statistically different compared with for-profit and nonprofit facilities; nor were there statistically significant differences in COVID-19 deaths or deaths by any cause between PE-owned nursing homes and for-profit, nonprofit, and government-owned facilities. For-profit, nonprofit, and government-owned nursing homes were 10.5% (9.1 percentage points; 95% CI, 1.8 to 16.3 percentage points; P = .006), 15.0% (13.0 percentage points; 95% CI, 5.5 to 20.6 percentage points; P < .001), and 17.0% (14.8 percentage points; 95% CI, 6.5 to 23.0 percentage points; P < .001), respectively, more likely to have at least a 1-week supply of N95 masks than PE-owned nursing homes. They were 24.3% (21.3 percentage points; 95% CI, 11.8 to 30.8 percentage points; P < .001), 30.7% (27.0 percentage points; 95% CI, 17.7 to 36.2 percentage points; P < .001), and 29.2% (25.7 percentage points; 95% CI, 16.1 to 35.3 percentage points; P < .001) more likely to have a 1-week supply of medical gowns than PE-owned nursing homes. Government nursing homes were more likely to have a shortage of nurses (6.9 percentage points; 95% CI, 0.0 to 13.9 percentage points; P = .049) than PE-owned nursing homes. In this cross-sectional study, PE-owned nursing homes performed comparably on staffing levels, resident cases, and deaths with nursing homes with other types of ownership, although their shortages of PPE may warrant monitoring.

Have Private Equity Owned Nursing Homes Fared Worse Under COVID-19?

Over 40% of U.S. COVID-19 deaths occurred in nursing homes. Given increasing private equity (PE) ownership in healthcare and long-standing concerns that PE investors focus on profits to the detriment of patients, it is important to understand the impact of PE ownership during the COVID-19 pandemic. This study evaluates how PE acquisitions impacted the readiness and outcomes of nursing facilities during the onset of the COVID-19 pandemic. We relate PE ownership to COVID-19 cases, deaths, and personal protective equipment (PPE) shortages, controlling for facility characteristics, resident composition, local characteristics, and the severity of COVID-19 outbreak near the facility. PE ownership was associated with a mean decrease in the probability of confirmed resident cases by 7.1 percentage points ("pp") (p<0.01) and confirmed staff cases by 5.4 pp (p=0.01). PE was also associated with decreased probability of PPE shortages—including N95s (6.4 pp; p<0.01), surgical masks (7.6 pp; p<0.01), eyewear (4.8 pp; p<0.01), gowns (7.0 pp; p<0.01), gloves (3.3 pp; p=0.02), and hand sanitizer (2.3 pp; p=0.12). Facilities previously (but not presently) owned by PE firms did not fare similarly well. Prior PE ownership was associated with increased PPE shortages and, if anything, higher probability of resident outbreaks. Our results indicate that—contrary to a common media narrative—PE-owned facilities have actually fared better under the COVID-19 pandemic. They also suggest that the long-run consequences of PE ownership warrant further research.

Institutional Review Board Quality, Private Equity, and Promoting Ethical Human Subjects Research.

Evaluating the quality and effectiveness of the institutional review boards (IRBs) responsible for overseeing research involving human participants is critically important but perpetually challenging. Seemingly common-sense measures, such as the number of proposals approved with and without major modifications and the number of unexpected adverse events occurring in approved protocols, can be misleading indicators of participant protection, and regulatory compliance may not correspond to achieving ethical goals. These measurement challenges make it difficult to assess the validity of concerns about different IRB models. A group of U.S. senators recently raised questions about the increasing use of for-profit IRBs to review research proposals (as opposed to boards typically housed at academic medical centers and health care institutions) and, more specifically, about the growing trend of private equity ownership and consolidation of for-profit IRBs. Although all IRBs face pressure to speed reviews and none are entirely free of conflicts of interest, the private equity model is particularly susceptible to approaches that could undercut the ethical mission of IRBs to protect and promote the rights and welfare of research participants. Ideally, the quality of board oversight could be measured directly, rather than relying on the heuristic of board type; this article describes several current efforts toward this goal. In the meantime, one improvement may be to pursue a new model of IRB oversight: independent nonprofit boards that stand apart from research institutions, take advantage of business approaches to research review, and minimize conflicts of interest.

Private Equity, Consumers, and Competition: Evidence from the Nursing Home Industry

This paper studies how product market competition can shape how private equity (PE) acquisitions impact consumers. We examine PE acquisitions in the nursing home industry and find that PE-owned facilities exhibit greater sensitivity: they compete more aggressively when competitive incentives are strong and exploit market power more aggressively when competitive incentives are weak. Our study leverages variation in competitive incentives deriving both from geographic differences in local market concentration, as well as from a pro-competitive policy that helped consumers better compare nursing homes. Our findings suggest that policymakers and regulators concerned about the impact of PE ownership on consumers should pay careful attention to the concentration of markets where PE acquisitions occur and consider pro-competitive policies as a tool to influence PE, mitigating or even reversing its potentially adverse consequences.