Ownership of medical practices, use of intensive care service, and neonatal outcomes

Compared to nations of similar economic status, the United States has a high rate of preterm birth and 12-15% of all newborns require admission to the neonatal intensive care unit (NICU). Both the outcomes and use of NICU care for all infants varies widely across hospitals and geographic regions, which contributes to inefficient care delivery and adverse health outcomes for all infants. One significant change in the delivery of perinatal care has been the rise of private equity, or investor-owned, ownership of both neonatal physician groups delivering care and hospitals that supply the NICU. In the United States, private-equity corporations are now estimated to own 25% of all hospitals, and in many specialties such as dermatology, obstetrics, and ophthalmology these groups have an increasing share of practices nationally. While studies have shown mixed impacts on adult outcomes, only one small study of private equity ownership in neonatology, the acquisition of 36 physician groups over an 8-year period, found higher payments to these groups without any change in outcomes. There have been no further studies of the role of private equity ownership on neonatal care. This study, then, is designed to examine how ownership of neonatal physician groups, hospitals that provide neonatal care, or the combination of both affect the outcomes and use of NICU care for newborn patients in the United States. To study this question, we will link data on private equity ownership of physician and hospital groups that we have complied to a unique population-based dataset of all births in 15 states over a 25-year time period that encompass over 40% of all births in the United States. Using a staggered difference- in-differences approach and previously validated methods we have used to identify private equity acquisitions, we will examine the following specific aims: (1) Determine the impact of private-equity ownership of physician groups, hospitals that provide neonatal care, or the combination of both on mortality, morbidity, and length of stay of infants born prematurely during the birth hospitalization; (2) Determine the impact of private-equity ownership of physician groups, hospitals that provide neonatal care, or the combination of both on the use of NICU care, length of stay, and morbidity of term infants with less severe indications for which admission to the NICU may be discretionary, such as hyperbilirubinemia requiring phototherapy and hypoglycemia; and (3) understand how changes in ownership differentially affect infants with public insurance compared to private insurance. At the end of this project, we will have assembled evidence for potential positive, or negative, effects of private equity acquisition of neonatal care services for stakeholders, and further understand the potential multiplicative effects of such acquisition of physician and hospitals for patients and their families. Project Number: 1R01HD117955-01 | Fiscal Year: 2025 | NIH Institute/Center: Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD) | Principal Investigator: Scott Lorch (+1 co-PI) | Institution: CHILDREN'S HOSP OF PHILADELPHIA, PHILADELPHIA, PA | Award Amount: $749,272 | Activity Code: R01 | Study Section: Special Emphasis Panel[ZRG1 HSS-D (90)] View on NIH RePORTER: https://reporter.nih.gov/project-details/1R01HD11795501