The Impact of Private Equity Hospital Acquisitions on Maternal Health for Medicaid Patients.

Objective: To examine the impact of private equity (PE) hospital acquisitions on maternal health for Medicaid patients.

Study setting and design: This quasi-experimental study focuses on 66 PE acquisitions of hospitals between 2014 and 2018, analyzing national Medicaid claims data from 2011 to 2020. Using a difference-in-differences (DiD) framework, the study compares labor and delivery (L&D) outcomes at PE-acquired hospitals with matched control hospitals to evaluate the effects on patient volume, process of care, and quality outcomes for Medicaid patients.

Data sources and analytic sample: The analysis uses data from the Transformed Medicaid Statistical Information System (T-MSIS) and Medicaid Analytic eXtract (MAX), including over 1 million L&D hospitalizations. The analytic sample comprises 66 PE hospitals and 290 matched control hospitals.

Principal findings: PE acquisition was associated with a significant 12% decrease in Medicaid L&D market share (p < 0.05). The reduction was more pronounced in states with larger Medicaid-to-commercial payment gaps (-15.8% vs. -7.2%). However, no significant changes were observed in low-risk cesarean rates, number of procedures, length of stay, or severe maternal morbidity.

Conclusions: PE acquisitions of hospitals are associated with reduced Medicaid market share, particularly in states with lower Medicaid reimbursement relative to commercial insurance. Policymakers should consider addressing these issues by adjusting Medicaid payment rates to support vulnerable populations in PE-acquired hospitals.