Senator Raises Concerns Over Quality of Care in Emergency Rooms Run By Private Equity Firms

As a growing number of emergency rooms throughout the United States come under the control of private equity firms, a prominent U.S. lawmaker has sent letters to several entities raising serious concerns about the lack of quality care patients are receiving and serious repercussions it could have on the safety and security of residents.

Senator Gary Peters, of Michigan, chairman of the Homeland Security and Governmental Affairs Committee, issued a press release last week, indicating that he is requesting private equity firms and physician staffing companies provide additional information about patient care, business operations and staffing decisions at several emergency departments nationwide.

According to the press release, Peters’ office has interviewed more than 40 doctors working in emergency rooms across the country who expressed concerns about the care patients receive once private equity firms take over. He indicates that private equity-owned physician staffing companies operate about one-third of the nation’s emergency rooms, and more than a quarter of those that serve rural populations.

“I am concerned that our nation’s largest emergency medicine staffing companies may be engaged in cost-saving measures at the expense of patient safety and care, which could put our nation’s emergency preparedness at risk,” he said in the press release. “I am pressing these companies and their private equity owners for needed transparency so that we better understand how their business practices could be affecting patient safety, quality care, and physicians’ abilities to exercise independent judgment in providing patient care.”

The letters were sent out to Apollo Global Management, US Acute Care Solutions, Lifepoint Health, Blackstone, TeamHealth, KKR & Co., and Envision, seeking information on emergency department staffing, and corporate practices.

The letters warn that a lack of proper emergency room management could leave the nation vulnerable to mass casualty events, terrorist attacks, or another pandemic.

Private Equity Firm Healthcare Concerns

Private equity firms are investment management companies, and many buy healthcare facilities using mostly borrowed money and some raised by investors. The borrowed money becomes debt against the newly acquired facility, which must then generate enough revenue to pay off the debt. To do this, they usually cut operation costs, reduce staff, perform more costly procedures, and charge higher health care fees to patients, despite the implications these changes may have on patient health.

In a study published late last year in JAMA Network Open, researchers reported that patients receiving care in hospitals owned by private equity firms face an increased risk of falls, infections and other health complications, and were hospitalized for longer periods of time than patients admitted to privately owned hospitals.

Another study, published in 2021, found that nursing homes run by private equity firms faced similar problems, with increased Medicare costs, hospitalizations, and a potential lower quality of care.

Private equity nursing homes also charged residents 4% more, resulting in roughly $1,080 more in annual costs per patient, compared to other care facilities, the study found.