The past two decades have seen a rapid increase in Private Equity (PE) investment in healthcare, a sector in which intensive government subsidy and market frictions could lead high-powered for-profit incentives to be misaligned with the social goal of affordable, quality care. This paper studies the effects of PE ownership on patient welfare at nursing homes.With administrative patient-level data, we use a within-facility differences-in-differences design to address non-random targeting of facilities. We use an instrumental variables strategy to control for the selection of patients into nursing homes. Our estimates show that PE ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period. This is accompanied by declines in other measures of patient well-being, such as lower mobility, while taxpayer spending per patient episode increases by 11%. We observe operational changes that help to explain these effects, including declines in nursing staff and compliance with standards. Finally, we document a systematic shift in operating costs post-acquisition toward non-patient care items such as monitoring fees, interest, and lease payments.

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Background Although opioids remain the standard therapy for the treatment of postoperative pain, the prevalence of opioid misuse is rising. The extent to which opioid abuse or dependence affects readmission rates and healthcare utilization is not fully understood. It was hypothesized that surgical patients with a history of opioid abuse or dependence would have higher readmission rates and healthcare utilization. Methods A retrospective cohort analysis was performed of patients undergoing major operating room procedures in 2013 and 2014 using the National Readmission Database. Patients with opioid abuse or dependence were identified using International Classification of Diseases codes. The primary outcome was 30-day hospital readmission rate. Secondary outcomes included hospital length of stay and estimated hospital costs. Results Among the 16,016,842 patients who had a major operating room procedure whose death status was known, 94,903 (0.6%) had diagnoses of opioid abuse or dependence. After adjustment for potential confounders, patients with opioid abuse or dependence had higher 30-day readmission rates (11.1% vs. 9.1%; odds ratio 1.26; 95% CI, 1.22 to 1.30), longer mean hospital length of stay at initial admission (6 vs. 4 days; P < 0.0001), and higher estimated hospital costs during initial admission ($18,528 vs. $16,617; P < 0.0001). Length of stay was also higher at readmission (6 days vs. 5 days; P < 0.0001). Readmissions for infection (27.0% vs. 18.9%; P < 0.0001), opioid overdose (1.0% vs. 0.1%; P < 0.0001), and acute pain (1.0% vs. 0.5%; P < 0.0001) were more common in patients with opioid abuse or dependence. Conclusions Opioid abuse and dependence are associated with increased readmission rates and healthcare utilization after surgery.