Private Equity Acquisitions and Home Health Agency Use, Expenditures, and Quality

Importance Over the past 2 decades, the number of private equity (PE) acquisitions of Medicare home health agencies (HHAs) has increased considerably, with 6% of HHAs currently owned by PE firms. Objective To examine the impact of PE acquisitions of HHAs on home health use, costs, and quality measures. Design, Setting, and Participants This cohort study used Medicare fee-for-service claims data from 2011 to 2022 and Centers for Medicare & Medicaid Services HHA Cost Reports to measure home health visits, expenditures, and health outcomes among Medicare-certified HHAs. The sample included only Medicare fee-for-service beneficiaries 65 years and older with any HHA use. These data were linked to a novel dataset of PE acquisitions of HHAs. A stacked difference-in-differences design was applied to compare outcomes before and after PE acquisition to a matched set of non-PE HHAs. Data analyses were performed from June 2025 through May 2026. Main Outcomes and Measures The primary outcomes included (1) home health use (ie, total number of HHA visits per episode), (2) type of service use (ie, skilled nursing, home health therapy, home health aide, social work), (3) patient quality outcomes (ie, 30-day rehospitalizations, emergency department visits), and (4) HHA financial outcomes (ie, revenue, expenses, and profits). Results A total of 165 PE-acquired HHAs, serving 71 610 beneficiaries, and 422 matched for-profit non-PE HHAs, serving 170 066 beneficiaries, were identified. PE acquisition was associated with an absolute decrease of 1.11 HHA visits per episode (95% CI, −1.68 to −0.54 ; relative decrease, 8.3%) and an 11.3% decrease in total net expenses (log coefficient, −0.12; 95% CI, −0.22 to −0.01), while operating margins were 7.9 percentage points higher (95% CI, 5.1-10.7 percentage points). There were no statistically significant changes in net patient revenue, 30-day rehospitalizations, or emergency department visits. Heterogeneity analyses indicated that results were primarily driven by a single, large PE acquisition. Conclusions and Relevance In this cohort study with a difference-in-differences design, PE ownership of HHAs appeared to reduce service use and was associated with higher operating margins, with no statistically significant changes in patient quality outcomes, suggesting PE’s use of cost-containment strategies rather than revenue generation to increase profits. The effects appear to be driven by 1 large acquisition, highlighting the heterogeneity of the impact of PE across HHA deals.