Private-Equity Hospital Takeovers Boost Profits While Raising Patient Bills, New Report Finds

A recent report by the Campaign for Accountability examined financial data from 71 hospitals acquired by private-equity firms and compared them with 71 similar facilities. After acquisition, the private-equity hospitals earned an additional $669 per patient and saw operating margins rise by 6.5 percentage points, a roughly 31% increase, with even larger gaps for privately insured patients. The study found no statistically significant drop in operating costs, indicating that higher profits stem from increased charges rather than efficiency gains.

Legal filings and whistle-blower testimonies detail tactics such as reclassifying diagnoses to higher-priced categories, inflating therapy minutes, and performing unnecessary procedures, including dental work on children. Investor presentations confirm that revenue growth is expected to come from higher rates per case. The authors recommend stricter disclosure of ownership, bans on Medicare participation for private-equity hospitals, and stronger enforcement against upcoding and needless treatments.