Issues in healthcare delivery are not due to private equity but rather to flawed incentive structures that do not prioritise patient health and wellbeing, argued doctors David N Bernstein and Prakash Jayakumar in a joint op-ed in Becker’s Hospital Review last week.
Bernstein is a resident physician in the Harvard Combined Orthopedic Residency Program at Massachusetts General Hospital and Jayakumar is an assistant professor and director at the department of surgery and perioperative care at the University of Texas at Austin’s Dell Medical School.
Bernstein and Jayakumar describe the current US healthcare system as one that financially rewards those who deliver “the quantity of services delivered and goods sold, rather than quality – and specifically health outcomes benefiting patients relative to cost”, arguing that private equity in health care is a side effect of the current system, and the real issue lies in the underlying incentive structures. They note that even hospitals and health systems that are not owned or operated by private equity are facing financial struggles.
The co-authors propose a shift towards a healthcare delivery system that rewards health and enhances value for patients, minimising private equity’s role in healthcare and allowing physicians “to treat patients as they see fit as long as patient value remains optimised, and bureaucratic hurdles, including unnecessary paperwork, will likely be reduced”.
The proposed healthcare system, they continue, aligns the two goals of helping people and making money, “which are commonly thought or assumed to be mutually exclusive in healthcare”.
Bernstein and Jayakumar’s op-ed follows a recent study in the Journal of the American Medical Association, which found that “private equity acquisition was associated with increased hospital-acquired adverse events, decreased treatment of elderly and poorer patients, and increased hospital transfers”, and the US Senate’s probe into the role of private equity in the US healthcare space.
