what happens to the quality of patient care as private equity companies buy up companies that are providing health care?
Here is a blog post that I made a few days ago about a large group of people that are finding difficulty in getting insurance to cover needed therapy.
Imagine a disease so prevalent 40% of adults & 20% of kids deal with it yet treatments out of reach
Here is what www.perplexity.ai says about private equity companies buying up more and more of our healthcare services
The increasing control of healthcare systems by private equity (PE) firms is raising significant concerns about patient care quality and costs. Recent studies and investigations have revealed several troubling trends:
## Impact on Patient Care Quality
Private equity acquisitions of healthcare facilities are associated with a decline in patient care quality:
– A study published in JAMA found that after PE firms acquired hospitals, Medicare patients experienced a 25% increase in hospital-acquired complications, including a 27% rise in falls and a 38% increase in bloodstream infections from central lines[2].
– Research from Beth Israel Deaconess Medical Center showed that patient care experience worsened after PE acquisitions, with declining overall ratings and staff responsiveness[4].
– A Senate investigation reinforced these findings, revealing that quality of patient care declined in two PE-backed hospital systems while investors enjoyed substantial financial returns[5].
## Effects on Healthcare Costs and Utilization
PE involvement in healthcare is linked to increased costs and potentially unnecessary utilization:
– Studies have found increases in charged amounts per claim and allowed amounts per claim after PE acquisitions of physician practices[6].
– There’s evidence of increased patient throughput and inpatient utilization in PE-acquired facilities, raising concerns about potential overutilization of healthcare services[6].
– A systematic review led by Columbia Mailman School found that PE investments in healthcare were most closely associated with cost increases for payers and patients, in some cases as high as 32 percent[7].
## Workforce and Service Changes
PE acquisitions often lead to changes in workforce composition and service offerings:
– Research shows that PE takeovers of physician practices often result in changes to workforce composition and a reshaping of services based on profitability[1].
– There are instances of PE-acquired hospitals closing less profitable service lines or even entire facilities, potentially affecting access to care[6].
## Long-term Concerns
The long-term effects of PE involvement in healthcare are particularly worrying:
– PE firms typically prioritize short-term profits, often moving on from their healthcare investments within three to seven years[6].
– Patient care experience has been shown to continue worsening at PE-acquired hospitals with each additional year following acquisition, suggesting cumulative negative effects over time[4].
While some studies have found mixed results or potential improvements in certain quality metrics, the overall trend indicates that PE involvement in healthcare is associated with declining patient care quality, rising costs, and potential access issues. These findings highlight the need for greater transparency, monitoring, and regulatory oversight to protect patient interests in the face of growing PE influence in the healthcare sector.
Citations:
[1] https://sph.brown.edu/news/2024-02-14/private-equity-health-care
[2] https://news.harvard.edu/gazette/story/2024/01/healthcare-riskier-for-patients-at-private-equity-hospitals/
[3] https://www.commonwealthfund.org/blog/2024/private-equity-health-care-looking-state-policy
[4] https://medicalxpress.com/news/2025-01-patient-declines-private-equity-buys.html
[5] https://www.nbcnews.com/news/investigations/private-equity-reduces-patient-care-enriching-investors-senate-report-rcna186636
[6] https://nihcm.org/publications/the-growth-of-private-equity-in-us-health-care-impact-and-outlook
[7] https://www.publichealth.columbia.edu/news/private-equity-investments-health-care-may-increase-costs-degrade-quality
[8] https://lowninstitute.org/the-rising-danger-of-private-equity-in-healthcare/
[9] https://bioengineer.org/transformations-in-patient-care-quality-following-private-equity-acquisitions-of-u-s-hospitals/
[10] https://www.commonwealthfund.org/publications/explainer/2023/nov/private-equity-role-health-care
[11] https://www.nbcnews.com/investigations/private-equity-takes-over-hospitals-less-able-care-patients-jama-rcna164497
[12] https://hmpi.org/2024/06/19/an-update-on-impacts-of-private-equity-ownership-in-health-care-extending-a-systematic-review/
[13] https://jamanetwork.com/journals/jama/fullarticle/2829041
[14] https://www.nih.gov/news-events/nih-research-matters/infections-falls-increased-private-equity-owned-hospitals
[15] https://www.hklaw.com/en/insights/publications/2024/08/healthcare-private-equity-transactions-under-scrutiny-midyear-review
[16] https://www.healthcaredive.com/news/private-equity-healthcare-investing-pace-pitchbook/715280/
[17] https://www.commonwealthfund.org/blog/2024/private-equity-health-care-looking-state-policy
[18] https://nurse.org/news/nursing-home-private-equity-buyouts-concern/
[19] https://hms.harvard.edu/news/what-happens-when-private-equity-takes-over-hospital
[20] https://hsph.harvard.edu/news/private-equitys-appetite-for-hospitals-may-put-patients-at-risk/
[21] https://pmc.ncbi.nlm.nih.gov/articles/PMC6682417/
[22] https://www.chcf.org/publication/private-equity-in-health-care-prevalence-impact-and-policy-options-for-california-and-the-u-s/
[23] https://www.healthcare-brew.com/stories/2024/11/12/states-trying-control-private-equitys-effect-healthcare
[24] https://nihcm.org/publications/the-growth-of-private-equity-in-us-health-care-impact-and-outlook
[25] https://medcitynews.com/2024/06/healthcare-legal-private-equity/
[26] https://www.tctmd.com/news/patient-experience-worsens-when-private-equity-firms-acquire-us-hospitals
[27] https://californiahealthline.org/news/article/california-bill-legislation-attorney-general-private-equity-health-care-deals/
[28] https://www.medicaleconomics.com/view/private-equity-in-health-care-measuring-quality-of-care
[29] https://www.bain.com/insights/year-in-review-and-outlook-global-healthcare-private-equity-report-2025/
Insurers Limit Coverage of Prosthetic Limbs, Questioning Their Medical Necessity
https://www.medpagetoday.com/publichealthpolicy/equity-in-medicine/113718
To people in the amputee community, the coverage disparity amounts to discrimination
When Michael Adams was researching health insurance options in 2023, he had one very specific requirement: coverage for prosthetic limbs.
Adams, 51, lost his right leg to cancer 40 years ago, and he has worn out more legs than he can count. He picked a gold plan on the Colorado health insurance marketplace that covered prosthetics, including microprocessor-controlled knees like the one he has used for many years. That function adds stability and helps prevent falls.
But when his leg needed replacing last January after about 5 years of everyday use, his new marketplace health plan wouldn’t authorize it. The roughly $50,000 leg with the electronically controlled knee wasn’t medically necessary, the insurer said, even though Colorado law leaves that determination up to the patient’s doctor, and his has prescribed a version of that leg for many years, starting when he had employer-sponsored coverage.
“The electronic prosthetic knee is life-changing,” said Adams, who lives in Lafayette, Colorado, with his wife and two kids. Without it, “it would be like going back to having a wooden leg like I did when I was a kid.” The microprocessor in the knee responds to different surfaces and inclines, stiffening up if it detects movement that indicates its user is falling.
People who need surgery to replace a joint typically don’t encounter similar coverage roadblocks. In 2021, 1.5 million knee or hip joint replacements were performed in United States hospitals and hospital-owned ambulatory facilities, according to the federal Agency for Healthcare Research and Quality, or AHRQ. The median price for a total hip or knee replacement without complications at top orthopedic hospitals was just over $68,000 in 2020, according to one analysis, though health plans often negotiate lower rates.
To people in the amputee community, the coverage disparity amounts to discrimination.
“Insurance covers a knee replacement if it’s covered with skin, but if it’s covered with plastic, it’s not going to cover it,” said Jeffrey Cain, MD, a family physician and former chair of the board of the Amputee Coalition, an advocacy group. Cain wears two prosthetic legs, having lost his after an airplane accident nearly 30 years ago.
AHIP, a trade group for health plans, said health plans generally provide coverage when the prosthetic is determined to be medically necessary, such as to replace a body part or function for walking and day-to-day activity. In practice, though, prosthetic coverage by private health plans varies tremendously, said Ashlie White, chief strategy and programs officer at the Amputee Coalition. Even though coverage for basic prostheses may be included in a plan, “often insurance companies will put caps on the devices and restrictions on the types of devices approved,” White said.
An estimated 2.3 million people are living with limb loss in the U.S., according to an analysis by Avalere, a healthcare consulting company. That number is expected to as much as double in coming years as people age and a growing number lose limbs to diabetes, trauma, and other medical problems.
Fewer than half of people with limb loss have been prescribed a prosthesis, according to a report by the AHRQ. Plans may deny coverage for prosthetic limbs by claiming they aren’t medically necessary or are experimental devices, even though microprocessor-controlled knees like Adams’ have been in use for decades.
Cain was instrumental in getting passed a 2000 Colorado law that requires insurers to cover prosthetic arms and legs at parity with Medicare, which requires coverage with a 20% coinsurance payment. Since that measure was enacted, about half of states have passed “insurance fairness” laws that require prosthetic coverage on par with other covered medical services in a plan or laws that require coverage of prostheses that enable people to do sports. But these laws apply only to plans regulated by the state. Over half of people with private coverage are in plans not governed by state law.
The Medicare program’s 80% coverage of prosthetic limbs mirrors its coverage for other services. Still, an October report by the Government Accountability Office found that only 30% of beneficiaries who lost a limb in 2016 received a prosthesis in the following 3 years.
Cost is a factor for many people.
“No matter your coverage, most people have to pay something on that device,” White said. As a result, “many people will be on a payment plan for their device,” she said. Some may take out loans.
The federal Consumer Financial Protection Bureau has proposed a rule that would prohibit lenders from repossessing medical devices such as wheelchairs and prosthetic limbs if people can’t repay their loans.
“It is a replacement limb,” said White, whose organization has heard of several cases in which lenders have repossessed wheelchairs or prostheses. Repossession is “literally a punishment to the individual.”
Adams ultimately owed a coinsurance payment of about $4,000 for his new leg, which reflected his portion of the insurer’s negotiated rate for the knee and foot portion of the leg but did not include the costly part that fits around his stump, which didn’t need replacing. The insurer approved the prosthetic leg on appeal, claiming it had made an administrative error, Adams said.
“We’re fortunate that we’re able to afford that 20%,” said Adams, who is a self-employed leadership consultant.
Leah Kaplan doesn’t have that financial flexibility. Born without a left hand, she did not have a prosthetic limb until a few years ago.
Growing up, “I didn’t want more reasons to be stared at,” said Kaplan, 32, of her decision not to use a prosthesis. A few years ago, the cycling enthusiast got a prosthetic hand specially designed for use with her bike. That device was covered under the health plan she has through her county government job in Spokane, Washington, helping developmentally disabled people transition from school to work.
But when she tried to get approval for a prosthetic hand to use for everyday activities, her health plan turned her down. The myoelectric hand she requested would respond to electrical impulses in her arm that would move the hand to perform certain actions. Without insurance coverage, the hand would cost her just over $46,000, which she said she can’t afford.
Working with her doctor, she has appealed the decision to her insurer and been denied three times. Kaplan said she’s still not sure exactly what the rationale is, except that the insurer has questioned the medical necessity of the prosthetic hand. The next step is to file an appeal with an independent review organization certified by the state insurance commissioner’s office.
A prosthetic hand is not a luxury device, Kaplan said. The prosthetic clinic has ordered the hand and made the customized socket that will fit around the end of her arm. But until insurance coverage is sorted out, she can’t use it.
At this point she feels defeated. “I’ve been waiting for this for so long,” Kaplan said.
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