Private equity firms — high-dollar investors known for aggressively seeking profit — and publicly traded health conglomerates have been buying up businesses that provide hospice care. But when it comes to caring for patients facing the end of their lives, those businesses perform worst, according to a research letter published earlier this week in the Journal of the American Medical Association.

Since private equity firms and publicly traded companies thirst for short-term profit, the researchers wanted to see if they sacrificed quality to get it.

Publicly traded behemoths such as UnitedHealth Group and CVS Health are already the subject of investigations and lawsuits by federal and state government over allegedly anticompetitive actions as drug middlemen. At the same time, both provide hospice care.

Meanwhile, the business practices of private equity groups have been coming under increasing scrutiny over the past decade. They often buy businesses in deals structured so they can quickly recoup their investment, identify the most profitable assets, sell them and then sell the resulting business or declare bankruptcy. Indeed, private equity funds were behind 65% of billion-dollar bankruptcies in the first half of 2024, the Private Equity Stakeholder Project reported in September.

In her book “These are the Plunderers,” journalist Gretchen Morgenson reported how they sought profit by purchasing medical providers such as emergency rooms, sometimes engaging in surprise billing, and then fighting legislation intended to stop the practice.

In the case of hospice care, researchers at Emory, Vanderbilt, and Cornell universities, plus the Department of Veterans Affairs, looked at four different ownership models for hospice providers and evaluated the quality of care provided by each. It classified providers as for-profit private equity, publicly traded for-profit companies, for-profit companies that are neither publicly traded or private equity, and nonprofit.

To evaluate quality, they looked at datasets of eight indices — “communication, timely care, treating family member with respect, emotional and religious support, help for symptoms, hospice care training, hospice rating, and willingness to recommend.”

When they ran the numbers, the researchers’ suspicions were confirmed.

“Across all… measures, (private equity and publicly traded company) owned hospices demonstrated the lowest performance and not-for-profit hospices the highest performance,” the research letter said.

Placed on a scale of one to 100, private equity and publicly traded company-owned hospice providers scored 79.8 points, other for-profit companies scored 81.2 points, and nonprofits scored 83.1 points.

“Although prior research has highlighted poorer user experiences in for-profit vs not-for-profit hospices, this study found that (private equity or publicly traded company) ownership was an especially problematic category of for-profit hospice,” the report said.

Another issue that critics of private equity have been raising is that some of its biggest investors — pension funds — represent people private equity is hurting.?For example, the Ohio State Teachers Retirement System has plowed $1.3 billion into private equity groups that are heavily invested in big fossil fuel producers and users.

This story is republished from the Ohio Capital Journal, a sister publication to the Kentucky Lantern and part of the nonprofit States Newsroom network.