The study, which examined 156 purchases over the past decade, was published Tuesday in JAMA, the journal of the American Medical Association.
Researchers were unable to detail what happened to the lost assets in every case but noted that private-equity investors “have sometimes sold acquired hospitals’ land and buildings, repaying investors with proceeds and burdening hospitals with rent payments for facilities they once owned.”
The study comes as the role of private-equity firms in health care is drawing heightened scrutiny. In March, federal regulators announced they would be investigating private-equity acquisitions of hospitals and other health-care providers over their profit-taking and effect on patient care.
Federal Trade Commission Chair Lina Khan said in a statement at the time that the agency would investigate “strip-and-flip tactics” and “other financial plays that can enrich executives but leave the American public worse off.”
“When private equity firms buy out healthcare facilities only to slash staffing and cut quality, patients lose out,” Khan said in the statement.
The American Investment Council on Monday continued to defend the role of private equity in U.S. health care.
“While we were unable to review this study before publication, the reality is that private equity plays a limited role in the health-care sector,” according to a statement from a council spokesperson. “When it is used, private capital helps drive medical innovation, increase access to care, and improve local communities.”
Private-equity firms, which pool money from wealthy investors, financial firms and pension funds, buy up companies and typically seek to sell them again within about 10 years. They have spent hundreds of billions of dollars buying up hospitals, and today, more than 450 U.S. hospitals are owned by private-equity firms, according to the Private Equity Stakeholder Project, a watchdog group.
Previous studies have found that patient care can suffer after private-equity investors buy a hospital.
Their investments in hospital and other health-care facilities have also led to some notable failures, such as the bankruptcy of one of the nation’s largest nursing home chains and, more recently, of Steward, which is one of the biggest hospital bankruptcies in U.S. history.
The new study, which was conducted by physician researchers at the University of California at San Francisco, Harvard Medical School and the City University of New York’s Hunter College, found that at the hospitals acquired by private-equity investors, capital assets declined by 15 percent on average within two years. Assets at other hospitals rose by an average of 9 percent over the same time period, a net difference of 24 percent.
Per hospital, the decline amounted to a loss of $28 million in total assets, according to the authors.