Private Equity Harms Patients & Providers
Profit-driven provider ownership compounds the harm from profit-driven insurance. We must pursue a 3-step action plan: educate the public; persuade legislators; and implement universal public insurance with community-orientated providers.
January 19, 2025
Changes in Patient Care Experience After Private Equity Acquisition of US Hospitals
JAMA
January 9, 2025
By Anjali Bhatia, et al
Conclusions and Relevance: Patient care experience worsened after private equity acquisition of hospitals. These findings raise concern about the implications of private equity acquisitions on patient care experience at US hospitals.
A Private Equity Hospital Gets a True-Crime Twist
The American Prospect
January 14, 2025
By Maureen Tkacik
Another looted carcass of a for-profit hospital chain filed for Chapter 11 bankruptcy protection over the weekend, just days after it was the subject of an infuriating Senate Budget Committee report. Perhaps more pertinently, the filing comes ten weeks after the Pennsylvania attorney general sued its two founders and the private equity firm Leonard Green & Partners to claw back around $650 million in dividends they extracted from the company while clinicians were laid off en masse, ambulance drivers were forced to pay for their own gas, and rates of bedsores, sepsis, and other hospital-acquired conditions soared to some of the worst in the country.
Private Equity in Health Care Shown To Harm Patients, Degrade Care And Drive Hospital Closures
Sen. Chuck Grassley
January 7, 2025
Today, Sens. Chuck Grassley (R-Iowa) and Sheldon Whitehouse (D-R.I.), in their respective categories as Ranking Member and Chairman of the Senate Budget Committee during the 118th Congress, released a bipartisan staff report on the findings of their investigation into ways in which private equity investment in health care has negative consequences for patients and providers.
Grassley said, “A dependable health care system is essential to the vitality of a community. As always, sunshine is the beast disinfectant. This report is a step toward ensuring accountability, so that hospitals’ financial structures can best serve patients’ medical needs.”
Whitehouse said, “As our investigation revealed, these financial entities are putting their own profits over patients, leading to health and safety violations, chronic understaffing, and hospital closures.” “Private equity investors have pocketed millions while driving hospitals into the ground and then selling them off, leaving towns and communities to pick up the pieces.”
Comment by: Don McCanne
For a great many years now, we’ve thought that we could simply improve Medicare by expanding its benefits, eliminate the waste of the private insurance industry, and include everyone so that we would end up with a truly altruistic health care system capable of controlling costs by eliminating wasteful spending and improving performance. We would then have a health care system that would be the envy of all other nations.
While we have been busy trying to convince voters and legislators that this would be the route to take, private interests have been increasingly directing the mission of our health care system from providing the best care for patients to creating greater wealth for administrators and investors. Perhaps the most obvious is shifting the goals of private insurance from paying for optimal health care services for patients to insurance products designed specifically to divert health care dollars to profits, resulting in higher costs and poorer performance.
Another example of how our health care dollars are diverted to corporate interests is the growth of private equity investment in providers. Investor organizations purchase components of our health care delivery system, drain them of assets, and then place them into bankruptcy or simply shut them down when they are no longer capable of providing care because of financial insolvency.
Sadly, our task is no longer simply to improve and expand Medicare, but also to seek greater regulation and even ownership of providers. Many believe that this would be best accomplished by increasing community control and ownership.
This also means that political control must be in the hands of individuals who insist that patients should come before profits. These views have been strongly held by progressives who have been sidelined by neoliberals and conservatives. When conservatives gained control in Canada and in England, the services of their respective single payer and national health service systems deteriorated, primarily due to longer wait times due to inadequate public funding. Wouldn’t it be nice if set aside political divisions and agreed that this should be about policies that work for everyone?
So now we not only have the task of installing a financing system that would enable everyone to have access to comprehensive health care through single payer (improved Medicare for All), but now we also must gain control of private funding of the health care delivery system. Since we have a new government that wants to further reduce taxes for the very wealthy and pay for that by reducing beneficial government services for the rest of us, you can see that a very difficult task awaits us.
We can do it with a three-step process. The first is labor intensive: we must educate the public of the great benefits that will ensue by making these changes. To do this, we must simplify the communication of the concepts so that everyone will understand clearly why we have to do this. Second, we must join together, as individuals and organizations, in a political process that will convince legislators that this is the solution that we have all been waiting for. With overwhelming public demand, they will have to lead us to the third phase – enacting and implementing our vision for universal, patient-oriented financing and care.
We do have an inkling of good news. We now have politicians from both major parties, Sen. Grassley and Sen. Whitehouse, who have brought before Congress, through the Senate Budget Committee, the fact that problems in our health financing system are serious enough that it requires the attention and action of Congress.
So now all we have to do is flesh out the three-step action plan. Let’s get to work!
(Later this week: Review of the policy landscape.)
About the Commentator, Don McCanne
Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.
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