Aug 18, 2026 · 21 min · 9 segments
Health Affairs Publishing’s **Rob Lott** speaks to **Jiebing Wen** of **The University of Texas at Austin** about her recent paper exploring how…
Jiebing WenGuest
Rob LottHost
Yeah, it really sounds like it a lot of potential upside there that that might be attractive to these investors.
Now, I think generally speaking, PE has kind of gotten a bad rap when it comes to sort of inserting or investing in in the health care system.
But I'm curious sort of what the evidence or the literature knows about the role of private equity as well as publicly traded corporate acquisitions in terms of quality of care in medical practices in general, but specifically in hospice? What do we know about the impact of their role on people's experiences receiving that care?
PE firms and PTCs face distinct pressure to generate short term above market returns.
PE firms typically target annual return exceeding 20% and seek to sell acquired agencies within three to five years, roughly.
And the PTCs, which are owned by public shareholders, face pressure to deliver consistent quarterly earnings.
Prior research on nursing homes, hospitals, and hospice agencies suggests that PE and PTC ownership creates strong profit incentives, potentially leading to lower quality, particularly under PE ownership.
Importantly, the effect of PE and PTC acquisitions on hospice quality of care was understudied.
Existing evidence suggests that this ownership model may influence resource allocation, patient mix, care location, and consumer satisfaction.
Brown and a colleague using 2022 Medicare cost reports found that PE-owned hospices reported the highest profits and the lowest spending on direct patient care, and including nursing labor compared with other ownership types.
Brown and colleagues using data from 2021-2022 Consumer Assessment of Healthcare Providers and Systems Hospice Survey found that hospices had significant, PE and PTC-owned hospices had significantly lower consumer reported quality ratings than hospices of other ownerships.
To our knowledge, before conducting this study, no studies have used the claim-based data and the rigorous quasi-experimental methods to examine the impact of PE and PDC acquisitions on hospice care delivery and Medicare reimbursement.
Yeah, it really sounds like it a lot of potential upside there that that might be attractive to these investors.
Now, I think generally speaking, PE has kind of gotten a bad rap when it comes to sort of inserting or investing in in the health care system.
But I'm curious sort of what the evidence or the literature knows about the role of private equity as well as publicly traded corporate acquisitions in terms of quality of care in medical practices in general, but specifically in hospice? What do we know about the impact of their role on people's experiences receiving that care?
PE firms and PTCs face distinct pressure to generate short term above market returns.
PE firms typically target annual return exceeding 20% and seek to sell acquired agencies within three to five years, roughly.
And the PTCs, which are owned by public shareholders, face pressure to deliver consistent quarterly earnings.
Prior research on nursing homes, hospitals, and hospice agencies suggests that PE and PTC ownership creates strong profit incentives, potentially leading to lower quality, particularly under PE ownership.
Importantly, the effect of PE and PTC acquisitions on hospice quality of care was understudied.
Existing evidence suggests that this ownership model may influence resource allocation, patient mix, care location, and consumer satisfaction.
Brown and a colleague using 2022 Medicare cost reports found that PE-owned hospices reported the highest profits and the lowest spending on direct patient care, and including nursing labor compared with other ownership types.
Brown and colleagues using data from 2021-2022 Consumer Assessment of Healthcare Providers and Systems Hospice Survey found that hospices had significant, PE and PTC-owned hospices had significantly lower consumer reported quality ratings than hospices of other ownerships.
To our knowledge, before conducting this study, no studies have used the claim-based data and the rigorous quasi-experimental methods to examine the impact of PE and PDC acquisitions on hospice care delivery and Medicare reimbursement.
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