We examine the survival prospects, employment profiles, and patient outcomes at private equity (PE)-acquired hospitals. Target hospitals maintain their survival rates while significantly reducing employment and wage expenditures. The number of core medical workers drops temporarily, but returns to its pre-acquisition level in the long run. However, administrative job and wage cuts persist over the long term, particularly at previously nonprofit hospitals. Using proprietary insurance claims data, we find no significant changes in patient demographics or inpatient prices at PE-acquired hospitals. While patient satisfaction declines, there is no evidence of increased patient mortality or readmission rates at PE-acquired hospitals.

We examine employment and patient outcomes at hospitals acquired by private equity (PE) firms and PE-backed hospitals. While employment declines at PE-acquired hospitals, core medical workers (physicians, nurses, and pharmacists) increase significantly. The proportion of wages paid to core workers increases at PE-acquired hospitals whereas the proportion paid to administrative employees declines. These results are most pronounced for deals where the acquirers are publicly traded PE-backed hospitals. Non-PE-backed acquirers also cut employment but do not increase core workers or reduce administrative expenditures. Finally, PE-backed acquirers are not associated with worse patient satisfaction or mortality rates compared to their non-PE-backed counterparts.