Fierce Healthcare May 5, 2021
From 2003 to 2017, private equity firms focused their acquisition crosshairs on larger hospitals with higher operating margins and greater patient charge-to-cost ratios, according to a new review of healthcare investments published in Health Affairs.
These private equity (PE)-owned hospitals also saw greater increases to their operating margins and charge-to-cost ratios over the course of the 15-year study period than their non-PE-owned counterparts.
Combined with a decrease in all-personnel staffing ratios, the study’s researchers said these data make a case for further investigation into how PE investment may be influencing operational decisions to boost profits and secure favorable exits.
“[Short-term acute care] hospitals’ large size, stable cashflow environment and prevalence of valuable fixed assets (that is, properties) make them highly...
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