As private equity firms continue to buy up hospitals, a November Health Affairs study found hospitals acquired by private equity firms were more likely to add profitable hospital service lines than non-acquired hospitals.
The study looked at private equity hospital acquisitions that occurred from Jan. 1, 2006, to Dec. 31, 2015, using a differences-in-differences approach. The sample consisted of 4,781 hospitals, including 228 acquired by private equity firms.
Some of these profitable services include interventional cardiac catheterization, hemodialysis, and labor and delivery. Acquired hospitals are also more likely to move toward profitable technologies like robotic surgery and digital mammography, and add freestanding or satellite emergency departments.
The only profitable service line that is less likely to be offered at a private equity-owned hospital is orthopedic surgery.
Hospitals acquired by private equity firms are also more likely to provide service lines that were previously considered unprofitable but are recently seen as a financial opportunity, like mental health services.
Lastly, hospitals acquired by private equity firms were less likely to take a chance on unreliable revenue streams or services that compete with nonprofit hospitals, like outpatient psychiatry.