Hospital behavior over the private equity life cycle

Michael R. Richards and Christopher M. Whaley

Journal of Health Economics, 2024, vol. 97, issue C

Abstract: Private equity is an increasing presence in US healthcare, with unclear consequences. Leveraging unique data sources and difference-in-differences designs, we examine the largest private equity hospital takeover in history. The affected hospital chain sharply shifts its advertising strategy and pursues joint ventures with ambulatory surgery centers. Inpatient throughput is increased by allowing more patient transfers, and crucially, capturing more patients through the emergency department. The hospitals also manage shorter, less treatment-intensive stays for admitted patients. Outpatient surgical care volume declines, but remaining cases focus on higher complexity procedures. Importantly, behavior changes persist even after private equity divests.

Keywords: Hospital; Private equity; Inpatient care; Hospital outpatient care (search for similar items in EconPapers)
JEL-codes: I11 I18 L21 L41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:97:y:2024:i:c:s016762962400047x

DOI: 10.1016/j.jhealeco.2024.102902

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