PE firms are known for buying distressed assets and trying to “flip” them for a profit.

But when it comes to hospitals, private equity has focused on profitable, large, urban hospitals, according to a new study that looked at 15 years of deals.

From Healthcare Dive:

Private equity firms are more likely to acquire hospitals with larger operating margins, more beds and in urban areas, according to a new analysis of 15 years of deals.

The analysis showed that private equity firms were more likely to buy hospitals that were larger and had healthier operating margins.

In 2003, the first year of the dataset, private equity firms acquired hospitals with an average of nearly 226 beds, while hospitals that were not acquired by PE firms had 188 beds on average.

The acquired hospitals also had more discharges and generated higher revenue for each discharge.

While those markers increased by the end of the 15-year period, acquired hospitals ended the period with lower staffing ratios than when first observed in 2003.

“Postacquisition, these hospitals appeared to continue to boost profits by restraining growth in cost per patient, in part by limiting staffing growth,” according to the report.