Recently, many hospitals have been sold (divested) by their initial PE owners to another PE firm or corporate owner. Hospital outcomes after such sales remain unknown. This article examines changes in hospital financial health after sale, contextualized with analysis of initial PE acquisitions. In this sample of 36 hospitals sold by their initial PE owners, those sold to a second PE firm increased hospital expenditures, which reduced operating margins, relative to peers sold to non-PE firms. In contrast, the initial PE acquisition (outside of HCA Healthcare hospitals) was followed by cuts in hospital expenditures, which likely reflected staffing reductions. This indicates that, on average, a second PE owner managed hospitals differently than other for-profit firms that buy hospitals from the initial PE owner.
Read the full article: Financial Health After Private Equity Hospitals Are Sold //
Source: https://jamanetwork.com/journals/jama-health-forum/fullarticle/2837043