Health Affairs February 1, 2025
Abstract
Private equity (PE) acquisitions of health care providers are often framed as a monolithic intervention, but firms’ strategies for generating returns for investors may vary. In a difference-in-differences analysis using data from the 2005–19 Medicare hospital cost reports, we compared 242 US hospitals acquired by PE firms with 870 matched control hospitals not acquired by such firms. By firm, we examined changes in salary expenditures (reflecting staffing costs of delivering care) and cumulative charges (reflecting service utilization) associated with acquisition. On average, hospitals acquired by PE firms reduced salary expenditures, whereas control hospitals increased salary...
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