U.S. Hospitals acquired by real estate investment trusts associated with greater risk of bankruptcy, closure
Harvard T.H. Chan School of Public Health
Key points:
- Real estate investment trust (REIT)-acquired hospitals were associated with a greater risk of bankruptcy or closure than non-REIT-acquired hospitals. REIT-acquisition of hospitals was not associated with any significant changes in quality of care or outcome indicators.
- The study is the first national examination of the consequences of REIT acquisitions of hospitals. According to the researchers, its findings suggest the need for greater regulatory oversight over these acquisitions.
Boston, MA—Real estate investment trust (REIT)-acquired U.S. hospitals were associated with a greater risk of bankruptcy or closure than non-REIT-acquired hospitals, according to a new study led by researchers at Harvard T.H. Chan School of Public Health. The findings also showed that REIT acquisition of hospitals had no significant impact on quality of care or clinical outcomes.
The study will be published Thursday, Dec.18, 2025, in the BMJ.
When a hospital sells its real estate to a REIT, the REIT then functions as a landlord with the hospital as a tenant. This practice has become increasingly common among private equity- and corporate-owned hospitals in the U.S. Proponents argue that the profits from a hospital’s sale of its real estate to a REIT can be used to improve clinical care. But concern has grown that for-profit hospital owners are using REITs as a strategy to strip assets from hospitals to generate returns to investors.
While prior studies have examined the consequences of private equity and corporate ownership of hospitals, none have evaluated the consequences specifically of REIT acquisition of hospitals. For this study, the researchers compared the clinical and financial outcomes of 87 hospitals that had been acquired by REITs from 2005-2019 with 337 non-REIT acquired hospitals. They assessed at a variety of data, including Medicare claims, financial performance, patients’ experiences at hospitals, hospital staffing levels, and clinical outcomes and quality, indicated by 30-day mortality and readmission rates for patients with heart attacks, congestive heart failure, and pneumonia.
The findings showed that REIT acquisition had no significant impacts on quality of clinical care or patient outcomes—but had a significant negative impact on a hospital’s finances. REIT-acquired hospitals had a 5.7-fold higher risk of closure or bankruptcy compared with non-REIT acquired hospitals.
“In REIT-acquired hospitals, there don’t seem to be any systematic reinvestments into clinical services, which is one of the arguments employed by private equity or corporate owners of hospitals as to why a REIT transaction may be beneficial,” said corresponding author Thomas Tsai, associate professor in the Department of Health Policy and Management, co-director of the Healthcare Quality and Outcomes Lab, and a surgeon at Brigham and Women’s Hospital. “What we see instead is that these hospitals are less likely to survive. As more and more financial resources are stripped away, it’s death by a thousand cuts.”
The researchers say the findings highlight the need for greater oversight over REIT acquisitions of hospital real estate.
“REIT acquisition of hospitals has the potential to help hospitals and the communities they serve, or to seriously damage them,” Tsai said. “The real-world evidence generated by our study can inform federal and state regulatory efforts to more closely monitor hospital ownership and transactions, to ensure that patients and communities are not being harmed.”
Article information
“Changes in hospital finance performance and quality of care after real estate investment trust acquisition; quasi-experimental difference-in-differences study,” Joseph Doc Bruch, Tarum Ramesh, Eric Boyang Yu, Jie Zheng, Jessica Phelan, E. John Orav, Thomas C. Tsai, The BMJ, December 18, 2025, doi: 10.1136/bmj-2025-086226
The study was supported by the Rx Foundation, the UM1TR004408 award through Harvard Catalyst 1, The Harvard Clinical and Translational Science Center (National Center for Advancing Translational Sciences, National Institutes of Health), and financial contributions from Harvard University and its affiliated academic health care centers.
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Journal
The BMJ
Method of Research
Observational study
Subject of Research
Not applicable
Article Title
Changes in hospital finance performance and quality of care after real estate investment trust acquisition; quasi-experimental difference-in-differences study
Article Publication Date
18-Dec-2025
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