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How private equity firms might contribute to medical malpractice

On Behalf of | Jan 5, 2024 | Medical Malpractice |

Private equity firms are companies that leverage funds provided by investors to buy businesses. Many private equity firms acquire both successful and struggling companies as a way to generate profit for shareholders and investors. For example, a private equity firm might purchase a business in decline, close the organization down and liquidate its assets. Other times, private equity firms may purchase struggling or even successful companies to run those businesses as a source of ongoing profit. They often make major changes to how companies operate when they acquire organizations as investments.

In recent years, private equity firms have begun investing heavily in the medical sector. This practice has already raised questions about medical practices and patient safety.

For-profit institutions don’t tend to prioritize patient care

There isn’t necessarily a great financial return available on ethical business practices. Hospitals and other medical facilities that try to provide robust patient support at affordable costs may eventually find themselves struggling financially. Private equity firms often take the opposite approach to managing patient care. Their biggest concerns are keeping costs as low as possible rather than ensuring optimal outcomes for patients. Unfortunately, this may lead to a noticeable decline in patient care and less favorable outcomes for those in need of medical treatment.

Some research has already indicated that the pressure private equity firms put on employees and their refusal to invest in cutting-edge systems can lead to issues for patients. These concerns can hit close to home when local hospitals experience financial challenges, like the financial issues at Iowa City’s Mercy Hospital that led to a bankruptcy sale to the University of Iowa. In this case, another local entity made the purchase, but struggling facilities could end up owned by private equity firms too.

Patients have rights after medical mistakes are made

Doctors and other medical professionals not given enough time or proper support to provide patient care could commit preventable mistakes that lead to negative patient outcomes. Those harmed by medical negligence or poor practices at a facility sometimes have the option of filing a medical malpractice lawsuit.

Holding a private equity firm accountable for the logical outcome of profit-driven medicine could compensate those harmed by poor care standards at a facility that has been treated like an investment, not a healthcare-driven endeavor.