Abstract
Private equity has a growing presence in the United States economy. This paper looks at how private equity affects business, and therefore consumers in the United States. Economic theory suggests that private equity can increase efficiencies by introducing more capital and technology to companies. However, an economies of scales approach harms communication flow and intrinsic motivation within the portfolio companies that a private equity firm owns. The theory and literature do not distinguish which of these has a greater effect on portfolio companies. I quantify the effect that private equity ownership has on a hospital by using an OLS regression with hospital overall ratings, mortality measurements, safety measures, and readmission rates for hospitals as dependent variables. My main independent variable is hospital ownership, which is a dummy variable that determines if a hospital is owned by private equity or not. The results reveal a negative correlation between the presence of private equity and the different hospital measurements. The negative relationship between private equity ownership reveals that private equity firms harm consumer wellbeing in the healthcare industry. Private equity has a focus on financial metrics and making a return while hospitals should be focused on quality-of-care, in order to best help consumers.
Advisor
Long, Melanie
Department
Business Economics
Recommended Citation
Fink, Will, "How Does Private Equity Affect Consumer Wellbeing: An Investigation of Hospital Ratings" (2025). Senior Independent Study Theses. Paper 11478.
https://openworks.wooster.edu/independentstudy/11478
Disciplines
Business
Publication Date
2025
Degree Granted
Bachelor of Arts
Document Type
Senior Independent Study Thesis
© Copyright 2025 Will Fink