Private equity is destroying ER care

With private equity, profits always come first. ER care is no exception. Keren Landman, MD reports for Vox on how private equity is destroying ER care. It’s good reason you should choose your hospital emergency room carefully.

One ER doctor Landman spoke with described how, when he started out, there were plenty of physicians in the ER, hospitals made sure that the physicians’ needs were met when the emergency rooms were at their busiest, and physicians delivered most of the care people needed in emergencies. Then, private equity bought his practice and everything changed very fast. In short, private equity saved money by cutting the number of physicians in the ER, reducing their hours and replacing them with nurse practitioners and physicians’ assistants.

This ER doctor quit his job once he was working for a private equity firm and moved to another hospital. Shortly thereafter, the same private equity firm bought the ER practice at this hospital. It happened again and again so that the ER doctor couldn’t find an ER that wasn’t private equity-owned.

With private equity ownership, the ER doctor reports that he and his colleagues were given little time to do their jobs and staffing was inadequate. As a result, patients were not getting the care they needed, whether they had a simple need or were at risk of dying from a heart attack. Consequently, patients were dying, perhaps not directly because of these cuts, but, if not, very likely indirectly.

What is private equity doing exactly? Private equity is buying ownership of ER doctors’ groups and other staff rather than buildings or equipment. Buying doctors’ groups allows private equity firms to charge patients whatever they please. People needing ER care can’t comparison shop. Private equity-owned ERs also tend to be out of insurer networks in order to boost ER profits. Once private equity takes over an ER department, on average, patient costs rise more than 80 percent.

As of March 2024, private equity now controls 25 percent of all emergency rooms in the US. It became easy for them to take over in the late 20th century early 2000’s after doctors’ groups contracted with hospitals to run their ERs . These “contract management groups” or CMGs centralized processes, were entrepreneurial, and focused on profits, which made it easy for private equity to buy them out.

In the early 21st century, private equity began its takeover of ER care. It saw profit opportunities from charging patients high prices for their care and from cutting ER staff. There’s no limit to what they could charge. In one case, a private equity firm charged a patient thousands of dollars for wound care for a half-inch wound to which glue was applied in the ER.

By 2010, private equity owned about nine percent of ER doctors’ groups. And, private equity ownership of hospital ERs continued to grow even after Congress passed its No Surprises Act law that kept private equity firms from gouging patients.