Beyond The Balance Sheet: Assessing Both Clinical And Community Impacts Of Private Equity Involvement With Healthcare Facilities Throughout The State Of Texas

Abstract

This paper works to analyze the effects of private equity ownership on hospitals throughout the state of Texas. The data that is analyzed is total yearly revenue, uncompensated care as a percentage of total revenue, potentially preventable complications rates, and average charges per case of the two most available conditions based on data. The data used is comprised of all available reports from the Texas Department of Health Services during the period from 2012 - 2023. The method that was performed was a staggered difference-in-difference design. This test was able to show the effects pre- and post-acquisitions of the hospitals against the control of the hospitals in Texas that were never acquired or involved with private equity in any way. The findings found an adverse effect from private equity in higher average rates of potentially preventable complications, charges per case, and overall drop in revenue. These effects took form with the greatest intensity three - four years post-acquisition. The findings support the idea that private equity is overall detrimental to patients of hospitals in the state of Texas as it brings lower quality of care and higher costs associated with care