Private Equity Ownership of Psychiatric Hospitals Is Growing; Outcomes Still Unclear

The number of psychiatric hospitals owned by private equity (PE) firms increased from 42 in 2013 to 87 in 2021, according to a survey in JAMA Psychiatry. While PE-owned facilities were associated with lower staff-to-patient ratios, they performed better on some quality measures, including lower reported use of restraints and a higher rate of follow-up visits

Morgan C. Shields, Ph.D., of Brown University, and colleagues noted that PE firms acquire ownership of entities with the goal of increasing value for subsequent resale at a profit. “Maximization of short-term profits may not directly translate into higher quality of care for patients and could even undermine quality,” they wrote. “For example, PE firms may reduce staffing or shift responsibility to clinicians with less expertise, even if existing staffing configurations are associated with better patient outcomes.”

The researchers used industry data (Pitchbook and Irving Levin Associates Health Care M&A database) and online searches to create a database comparing 87 PE-owned and 530 non–PE-owned psychiatric hospitals in 2021. The combined sample encompassed all Medicare-participating freestanding psychiatric hospitals in the United States.

PE ownership was not evenly distributed over the United States; rather, the majority of firms were located in Southern states. In 2021, Texas, Louisiana, and Ohio had the highest number of hospitals owned by PE—19, 16, and nine, respectively. New Mexico had the highest proportion of hospitals (75%) owned by PE.

The researchers assessed quality measures at each hospital such as staffing levels, restraint and seclusion rates, readmission rates, and follow-up rates, among others. PE ownership was associated with fewer staff days per patient day among registered nurses (0.12 versus 0.15) and medical social workers (0.02 versus 0.04) compared with non–PE-owned hospitals. Yet, PE-owned hospitals reported fewer hours of restraint use (0.03 versus 0.24 hours per 1,000 patient hours), lower 30-day readmissions (19.40% versus 20.16%), and higher seven-day (29.34% versus 26.28%) and 30-day (52.92% v 49.08%) follow-up visits.

Shields and colleagues noted that “restraint and seclusion measures are crude and prone to both gaming and error, especially given their self-reported nature,” adding that “follow-up and readmission measures, while intended to reflect hospital performance, are also driven by differences in outpatient environments.”

The researchers said that a new patient experience measure added to CMS’ Inpatient Psychiatric Facility Quality Reporting program could be a more sensitive and meaningful measure of inpatient care quality.

For more information, see the Psychiatric News article “Private Equity’s Inroads Into Mental Health Bring Concern.”

(Image: Getty Images/iStock/Sumedha Lakmal)

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Plenary Speakers at APA’s Fall Conference Focus on Social Determinants of Mental Health

APA’s two-day virtual Mental Health Services Conference was held Thursday and Friday, October 14 and 15. Summaries of the plenary addresses appear below. 

SAMHSA Partners With States to Target Social Determinants of Mental Health

In collaboration with states and communities, the federal government is committed to addressing social determinants of health (SDOH) and mental health, said Miriam E. Delphin-Rittmon, Ph.D., assistant secretary for mental health and substance use and administrator of the Substance Abuse and Mental Health Services Administration (SAMHSA). She made her remarks last Thursday at the opening plenary session of APA’s virtual 2021 Mental Health Services Conference.

“We know that having access to high-quality mental health care isn’t enough if people lack access to education, housing, and transportation,” she said. 

Delphin-Rittmon outlined SAMHSA’s initiatives and priorities specifically targeting SDOH. Among these is the Resiliency in Communities After Stress and Trauma, which assists high-risk youth and families in communities impacted by civil unrest. This program offers violence prevention and community youth engagement programs, as well as linkages to trauma-informed behavioral health services. She also described the Food and Mood Project, which aims to promote emotional wellness and reduce the impact of mental health and substance use issues in the Midwest and mountain states through strategies—such as school gardens—that address the link between behavioral health and food or food insecurity, and/or cultural food diversity. 

Delphin-Rittmon was joined by Sonja Gaines, M.B.A., deputy executive commissioner for Intellectual and Developmental Disability and Behavioral Health Services at the Texas Health and Human Services Commission, and Keri L. Waterland, Ph.D., director of the Division of Behavioral Health and Recovery at Washington State Health Care Authority. Gaines and Waterland shared examples of several innovative projects in their states that are aimed at addressing social determinants of mental health. These efforts are funded by SAMHSA. 

Delphin-Rittmon said, “We are here to be partners with APA and look forward to our ongoing collaboration addressing social determinants of health.”

Economist Encourages Framing of Mental Health as a Form of Capital

Taking an economics framework and applying it to the delivery of mental health can help psychiatrists better connect with decision-makers to help drive key policies, an economics scholar said during last Friday’s plenary session.

“It’s important to conceptualize mental health as a form of capital because without it, people cannot do the work they need to do; they cannot be productive,” explained Peter Q. Blair, Ph.D., M.Sc., an assistant professor at the Harvard Graduate School of Education and principal investigator of the Blair Economics Lab. “We want to think specifically and concretely about how to help and best serve those who are marginalized and experiencing severe symptoms. But we also want to think preemptively about mental health as a form of capital—that we need to invest in proactively or it will depreciate over time.” 

Blair said that mental health is not merely the absence of psychiatric symptoms, it also includes the ability to realize one’s capacity for agency and contribute to the larger society with dignity, Blair said. He discussed the role of educational opportunity, occupational skill attainment, and meaningful employment as instrumental components to mental health. Blair pointed out that even among those with the most serious mental illness, most want to work.

Blair also talked about the importance of psychiatrists investing in their mental health in the same way they invest in their physical health (through regular checkups and exercise) and education (through continuing coursework). 

Session moderator and psychiatrist Sarah Y. Vinson, M.D., founder of the Lorio Psych Group, said that shifting one of the profession’s focuses to prevention would require reimagining. “In medicine as a whole, and in psychiatry too, there’s more of a focus on pathology, on diagnoses, on illness.  People don’t [seek mental health services] until there’s a problem. ... Part of our challenge is we’re dealing with a system where we don’t have the resources to do the task we have.”

Blair pointed out that that mental illness can disproportionately affect marginalized populations. He delved into the social determinants of health and how racism has held back minority populations. He is working to channel the public outrage over the murder of George Floyd by police officers last May into action. For example, he is urging Fortune 500 companies to recognize the systemic racism inherent in today’s national employment market. One major barrier to economic mobility for Black people is the requirement for a college degree as a condition of employment, and so Blair is promoting the hiring of rising STARS, or individuals who have acquired Skills Through Alternative Routes.

Further coverage of the conference will appear in a future issue of Psychiatric News.