Over the past decade, private equity (PE) firms have increasingly invested in, acquired, and consolidated healthcare facilities,1 with global healthcare buyouts exceeding $200bn (£157bn; €184bn) since 2021 alone.2 PE firms use capital from institutional investors and individuals of high net worth in combination with large amounts of debt to acquire other companies, and they generally seek to sell their holdings on a quick 3-5 year turnaround for substantial returns.3 PE firms often enter fragmented markets through an “anchor investment,” in which an initial “platform practice” is acquired and then used to acquire more practices in a region and to consolidate them.4 One of the distinguishing features of PE investment is that the firms provide direct managerial oversight to acquired organizations, often making changes to increase valuation and future profit potential.5
The recent influx of PE ownership in the healthcare sector has prompted considerable speculation and debate among the medical community, pertaining to the possible impacts on healthcare delivery and the ethical dimensions of this form of investment structure.67 Critics argue that PE ownership could jeopardize patient safety by prioritizing profits, overburdening healthcare companies with debt, impeding care delivery through ongoing management changes and sellouts, and over-emphasizing profitable service lines in place of less profitable ones.18910 Meanwhile, proponents advocate that in addition to an infusion of capital, PE ownership may bring valuable managerial expertise, reduce operational inefficiencies, leverage economies of scale, and increase healthcare access by synergistically aligning profit incentives with high quality care provision.11121314 These debates have spurred increased academic, medical, and regulatory attention to PE ownership in healthcare, such as by prompting the Medicare Payment Advisory Commission to compile a report for US Congress,15 the American College of Physicians to publish a position statement,6 and think tanks to compile policy responses.16 Researchers have also identified the need for robust policy and legal frameworks to address the unique implications of PE ownership in healthcare.1718 Meanwhile, practicing physicians have debated how to respond when approached with an offer by PE investors, or if put into local market competition with them.71920
Empirical research on the impacts of PE ownership on healthcare operators has slowly accumulated, drawing attention to both the accelerating magnitude of PE ownership across medical settings and the context sensitivity of its impacts on local market and regulatory conditions.2122 However, the relatively nascent body of literature on PE ownership in healthcare remains disjointed, with studies ranging across different medical settings and academic disciplines such as sociology, health services research, and economics. Although several overviews have been published about PE ownership in healthcare232425 as well as two research reviews that focused on the growth of PE ownership and its impacts on dermatology,2627 no systematic reviews have been published that comprehensively evaluated the impacts of PE ownership across healthcare settings globally. If PE ownership becomes increasingly prevalent within and across health systems, it is imperative to understand its influence on healthcare delivery and whether it differs from other institutional arrangements and management strategies. To combine the existing body of literature and synthesize individual study findings, we conducted a systematic review focused on the impacts of PE ownership on health outcomes, costs to patients or payers, costs to operators, and quality as primary measures, and the prevalence of PE ownership as a secondary measure. We present a narrative synthesis of the impacts of PE ownership on these outcomes, including critical appraisals of existing evidence.
This systematic review is reported in accordance with the Preferred Reporting Items for Systematic Reviews and Meta-Analysis (PRISMA) statement (see supplementary material 1).28 The protocol for this review was developed in accordance with the PRISMA Protocol items (PRISMA-P)29 and was prospectively registered with PROSPERO.
Articles were eligible for inclusion if they contained original, empirical research on PE ownership of healthcare operators; addressed either the primary outcome measures (health outcomes, costs to patients or payers, costs to operators, and quality) or the secondary outcome measure (prevalence of PE ownership); contained data on years between 2000 and 2023 and were published within that timeframe; and were published in English. Studies of any design were eligible for inclusion—including quantitative, qualitative, or mixed methods approaches—as were studies involving any global geographic setting. Studies were excluded if they solely focused on non-operator healthcare organizations, such as laboratories or medical device companies, or if data on PE owned operators were not fully disaggregated from other ownership types, such as publicly traded companies.30 We also excluded viewpoints and commentaries without empirical findings, and qualitative studies that only presented informant perspectives, as opposed to empirical documentation of PE related developments. For the purpose of this review, all forms of PE investment, including leveraged buyouts, minority stakes, and majority stakes, were classified as PE ownership, as is common in the literature. Different clinical environments, such as those grouped by medical specialty (eg, dermatology or urology) or operator type (eg, nursing homes or hospitals) are referred to as healthcare settings.
In the context of this review, we defined costs to patients or payers as measures relating to the amount charged, owed, or reimbursed by patients or payers. Costs to operators were defined as direct or indirect operating costs. Quality was defined as any measure included on an established, specialty specific evaluation instrument, or more general measures such as staffing per patient day or appointment availability. Health outcomes were defined as measures of any important health or disease state outside of routine care, such as mortality or hospital admission. For the purpose of this review, we classified hospital readmission from a previous care encounter as a quality metric.
An electronic database search strategy was developed in collaboration with a medical research librarian. To obtain studies from a broad range of disciplines, we searched for those published between 2000 and 2023 on Embase, PubMed, Scopus, and Web of Science, as well as preprints published on SSRN, which is common practice in economics and other social sciences. We selected the year 2000 as a starting timepoint because global PE activity in healthcare began to increase noticeably only after the turn of the millennium.3132 We also believed that PE healthcare acquisitions before 2000 would be less relevant to present day acquisitions, nearly 25 years later. Two rounds of searches were conducted. The first search was performed on 9 June 2022, and the second search was done on 16 April 2023 to capture any additional studies that had been published since the first search. Supplementary material 2 provides the full search strategy and list of search terms. All articles identified by our search strategy were retrieved and uploaded using Covidence systematic review software.33
Two authors (AB and JDB) used Covidence systematic review software to independently screen titles and abstracts and remove duplicates. Studies that did not fit the inclusion criteria were excluded. Discrepancies were initially discussed collaboratively, and if consensus could not be reached, were resolved through a third author (ME); no disagreements occurred. AB and JDB retrieved and independently screened the full text of articles after title and abstract screening. Studies that did not match the inclusion criteria in the full text screening were excluded. Discrepancies were resolved through discussion between the same two authors until consensus was reached, with a third author (ME or GB) not needed to resolve disagreements. Two authors (AB and GB) independently extracted data on study characteristics using a pre-determined data extraction form, documenting for each study: authors, year published, study type, country evaluated, population evaluated, study period, comparison groups, whether primary measures were reported (health outcomes, costs to patients or payers, costs to operators, quality, or a combination of these factors, hereby referred to as impacts), whether secondary outcomes were measured (prevalence of PE ownership, hereby referred to as trends), time frame of data, and findings. For each category of health outcomes, costs to patients or payers, costs to operators, quality, or a combination of these factors, we also qualitatively documented whether the effects of PE ownership were found to be beneficial, harmful, mixed, or neutral. Any discrepancies were first discussed between the two authors (AB and GB) and escalated to a third author (JDB) if consensus could not be reached. Three authors (AB, GB, JDB) validated the final extraction results.
Risk of bias within individual studies
Two authors (AB and GB) independently assessed risk of bias for each quantitative study using the Risk Of Bias In Non-randomized Studies of Interventions (ROBINS-I) tool.34 The authors rated each of the seven domains for overall risk of bias as low, moderate, serious, or critical, with a third author (JDB) providing a final assessment for discrepancies in overall bias judgment. Generally, studies that were cross sectional and had limited control variables were rated as having serious or critical risk of bias due to uncontrolled confounding. Qualitative studies were assessed for quality and inclusion using the Joanna Briggs Institute Critical Appraisal Checklist for Qualitative Research.35 Risk of bias was not assessed for studies that solely reported trends in PE ownership or market share with no findings related to the impacts of PE ownership.
Studies that addressed main outcome measures were classified as reporting beneficial, harmful, mixed, or neutral impacts of PE ownership on health outcomes, costs, or quality, or a combination of these factors. Beneficial impacts consisted of improved health outcomes, reduced costs to patients or payers, reduced costs to operators, or improved quality at PE owned operators. Harmful impacts consisted of worse health outcomes, greater costs to patients or payers, greater costs to operators, or worse quality at PE owned operators. If a study found both beneficial and harmful impacts, the impact domain was classified as mixed, and if no differences were apparent, the impact domain was classified as neutral.
Two authors independently determined classifications using a holistic evaluation scheme. First, study results were extracted and each statistically significant finding (P≤0.05), effect size, and confidence interval (or standard error if not available) was recorded. Taking into account the study design, the authors’ stated primary versus secondary outcome measures, and the authors’ interpretations of their findings, we assigned beneficial, harmful, mixed, or neutral ratings to each domain within each study.
We narratively synthesized the relevant findings and looked for consistencies and divergences both within and across healthcare settings. To check the robustness of the full sample findings, we performed a sensitivity analysis including only studies with a moderate risk of bias. An additional sub analysis was performed on studies in nursing homes to identify impacts within settings, as this was the most commonly investigated setting.
Owing to the differences in study designs, healthcare operators, comparators, outcomes assessed, and outcome measurements, no meta-analyses were performed.
Public and patient involvement
No patients or members of the public were involved in the design, development of outcome measures, or other aspects of the conduct of this study, as no funding was set aside for public or patient involvement. This review was, however, motivated in part by patients and members of the public who have expressed uncertainty about the impacts of PE ownership in healthcare.
Overall, 1778 articles were identified from the two database searches, 852 of which Covidence automatically removed as duplicates. The titles and abstracts of the remaining 926 studies were screened, yielding 81 studies for full text review. During this stage, 26 further studies were excluded, leaving 55 studies in the final sample (fig 1). Of these studies, 32 evaluated the impacts of PE ownership on at least one category of health outcomes, costs to patients or payers, costs to operators, or quality, or a combination of these factors,2236373839404142434445464748495051525354555657585960616263646566 (table 1, table 2, and table 3) and 38 reported trends or prevalence of PE among healthcare operators (see supplementary material 3).2136383940414245495355606163646567686970717273747576777879808182838485868788 Fifteen studies in total reported findings for both impacts and trends.363839404142454953556061636465
Risk of bias
Risk of bias was assessed for the 31 studies that quantitatively analyzed and reported findings for at least one of: health outcomes, costs to patients or payers, costs to operators, or quality (fig 2).
According to the ROBINS-I tool, overall risk of bias was rated as moderate in 19 studies,22394243444547485051535657586062636566 serious in nine studies,364041464954596164 and critical in three studies.373855 No studies were rated as having low risk of bias. Confounding was the domain most frequently rated as serious or critical risk of bias and concerned 12 studies (see supplementary material 4). Although many studies used comprehensive and sophisticated statistical techniques to account for possible confounding and the non-random administration of the intervention and inclusion, other studies were less rigorous. Additionally, few studies provided detailed information on data missingness. Many studies used thorough identification strategies to document when healthcare operators obtained, lost, or already had PE ownership, and comprehensively reported subgroup analyses and effect estimates, including in supplemental materials.