Your chances of being injured or killed by the negligence of a healthcare provider at a hospital depend on many factors. According to a new study by researchers from Harvard Medical School, the University of Pittsburgh, and the University of Chicago, hospital emergency departments owned by private equity firms have higher mortality rates. How private equity manages these organizations may play a role.
The Fleck Firm represents those harmed by the negligence of Kentucky healthcare providers. If you believe that you’re injured by someone you trusted with your healthcare, call us at (270) 446-700 so we can discuss what happened.
What is Private Equity?
Private equity (PE) is a form of investment by private firms (not those publicly traded on stock markets) that raise money from investors to buy and take control of companies and healthcare providers such as hospitals, nursing homes, and medical practices.
These firms do the following:
- Raise large amounts of money from individuals, pension funds, and institutional investors like insurance companies
- Use this money, often in addition to loans, to buy companies or organizations they believe can be more profitable
- Ideally, they want to boost the operations’ value quickly (usually three to seven years), then sell it at a profit
Private equity is profit-driven, which is not inherently bad. However, when healthcare is involved, it may be more profitable to provide cheaper, substandard care than to commit the necessary resources to achieve the best outcomes for patients.
What is Medical Malpractice?
Medical malpractice is a type of negligence-based, personal injury legal action where a healthcare professional fails to provide you with the standard of care that a reasonably competent provider would offer under similar circumstances, and that failure caused your injury or harm.
The defendant (the party accused of medical malpractice) could be anyone providing you with substandard healthcare services. It could be a hospital, a doctor, a surgeon, a nurse, a pharmacist, or an emergency medical technician (EMT).
Medicine is complex, and not every unwanted outcome is malpractice. You may suffer complications from medical treatment after a healthcare professional does everything correctly. The issue is whether the harm you suffer is the result of a negligent action or failure to act that was below the standard of care expected of them.
What Shows Hospital Emergency Departments are More Dangerous?
The article in the Annals of Internal Medicine states there’s a significant increase in patient deaths in hospital emergency departments (EDs) of hospitals owned by private equity firms, compared to similar hospitals under different ownership. For Medicare patients (who are older and or have disabilities), their mortality increased by 13%. This was calculated as seven additional deaths per 10,000 emergency visits following private equity’s ownership.
This conclusion was drawn from data involving Medicare patients from 2009 to 2019 who had 1,007,529 ED visits and 121,080 intensive care unit (ICU) hospitalizations across 49 private equity hospitals. That information was compared with 6,179,854 ED visits and 760,377 ICU hospitalizations across 293 matched control hospitals.
Why Would This Happen?
Private equity firms typically acquire hospitals using investor money and loans, resulting in new debt obligations for the facilities. To cover these costs and maximize their investment returns, the hospital may implement aggressive cost-cutting strategies, primarily focusing on staffing and salaries. According to the study:
- Wages of those working in emergency departments were cut by an average of 18%
- Intensive care unit pay dropped by 16%
- Hospital-wide staff was cut by 11.6%
The result is less capacity to care for patients, including the following:
- Lower pay often leads to higher staff turnover. Experienced employees leave to work for higher pay elsewhere and are replaced by less experienced or qualified employees who are paid less
- Positions are eliminated, resulting in fewer people doing more, increasing the risk of mistakes
- Less supervision so that errors could be made with important care decisions and treatment, or they could be delayed
The study also found that transfers to other hospitals increased, and ICU stays were shortened after private equity ownership. These are signs that hospitals had less capacity for high-risk cases. Depending on the situation, transferring a seriously ill or injured patient can be very risky because they may not receive appropriate care if something goes wrong during transit from one hospital to another.
How Would This Impact a Medical Malpractice Claim?
The study is part of mounting evidence that when healthcare services are run for a profit, there’s a greater chance that care will suffer. Resources are cut, and although management may try to maintain care, they learn that fewer resources and overworked, less qualified employees don’t deliver what patients need, especially those with severe illnesses or injuries.
Hospital ownership may believe the costs of increased medical malpractice claims are less than their overall cost savings, so they’ll tolerate a certain amount of substandard care. When a facility dramatically cuts costs, harmed patients aren’t freak accidents. They’re foreseeable and preventable harms, caused by the need for higher profits to pay for their increased debt load and returns to investors.
Each case is unique, but a claim against this kind of hospital could be supported by answers to critical questions, including the following:
- Were staffing levels appropriate for the patient’s needs?
- Were protocols followed, or were resources stretched too thin to do that?
- Did similar mistakes happen in the past? If so, what, if anything, was done to prevent the one that happened?
- Was the patient admitted despite the fact the hospital may be unable to provide adequate care?
- Were important decisions delayed because healthcare providers weren’t available?
- Was the patient injured during a transfer that happened due to a hospital’s lack of resources?
- Did financial pressures influence medical decisions?
Truthful answers to questions like these are the difference between a successful medical malpractice claim and one that will be dismissed.
Get the Legal Help You Need in Kentucky
If you or a family member is injured by medical malpractice, we can help. Schedule a free consultation by calling the Fleck Firm at (270) 446-7000 or contact us online. We’ll discuss what happened, the injuries, how Kentucky law may apply, and your best options going forward. Insurance companies have lawyers. You should have one, too.
