A global study has found private equity ownership of healthcare services, including hospitals and nursing homes, results in higher costs and worse care.

The University of Chicago led research published in the BMJ assessed healthcare service takeovers in eight countries, including the US, UK, Sweden and the Netherlands.

Nine of 12 studies showed higher costs at healthcare facilities owned by private equity firms, three were neutral and none showed lower costs.

The results on costs to the health system, evaluated in five studies, were mixed, with two showing higher costs and three showing lower costs, one of which was deemed at serious risk of bias.

The reports authors concluded: “Such [private equity] ownership is often associated with harmful impacts on costs to patients or payers, and mixed to harmful impacts on quality.”

Among 27 studies that measured quality of care, 12 reported worse quality scores associated with private equity ownership, nine reported mixed results (some quality measures declined, some improved), and three reported neutral results after private equity acquisition.

Eight studies assessing patient outcomes were evenly split between positive (2), negative (3) and neutral (3) results.

The report concluded the preponderance of evidence clearly suggested that quality and outcomes deteriorate after a private equity takeover.

Private equity investment in healthcare provider institutions has reached record highs in recent years in both Europe and the US.

In the UK, Four Seasons Health Care is currently operated by administrators after falling into debt under private equity ownership.

The problems of Four Season once again raised the debate over whether the three to seven-year investment cycle of private equity organisations is a suitable ownership model for healthcare institutions caring for vulnerable people.

Cat Hobbs, director of public ownership campaign group We Own It, said: “Lucrative private equity ownership is rapidly growing and it’s patients who lose out. As this latest study shows, we’re seeing worse quality care for higher costs. And no wonder: private equity firms will always prioritise their financial returns.

“We can’t trust these firms with the care of vulnerable people. Nor can we trust them not to cut critical but less profitable services.

“The US has gone further down this track and study after study is showing the dangers. Now we need to learn the lessons. If we follow in their footsteps, we’re heading in the wrong direction. We need an about-turn: we need a fully-public NHS, and publicly-owned nursing homes providing a better deal and better care.”