The health of many Americans is seriously under threat because private equity firms are taking over hospitals. These private equity firms have taken over some 450 hospitals across the United States.
Private equity firm Steward had acquired over 37 hospitals in the United States alone.
Besides hospitals, reports state that the takeover has extended into the acquisitions of 750 nursing homes, 200 emergency set-ups, 5,779 doctor’s practices and two-thirds of the country’s air ambulances.
In this growing takeover trend, over the last 10 years, these private equity investors have paid out around $1 trillion in the last 10 years.
Succinctly put by Massachusetts State Senator Cindy Friedman:
“Private equity is the complete opposite of the delivery of healthcare…” She goes on to say “… make money, leave, make it however you want, make it for people who are interested in making money, and then you have got healthcare, which is all about delivering care to people. The cost is not the first thing. The delivery care is the first thing. And those two things do not mesh.”
In other words, because of an increase in financialization, the effectiveness of healthcare has been significantly compromised due to private equity involvement, making a number of cost-cuts in healthcare services that, in effect, put profits over the genuine welfare concern of patients.
The increase in financialization overseen by its financial actors with main street corporations has been allowed to happen due to deregulation that had taken place decades ago.
-This is one of a number of examples whereby corporations ‘eat each other up’ through takeovers and buyouts. Eventually there’s only a tiny handful of giant corporations left who practically own everything through monopolization. Consider the likes of behemoth corporations like BlackRock, Blackstone and Vanguard…
-As a result, the services, as in healthcare, are not as good due to cost-cutting and there’s little in the way of competition to choose from as an alternative provider.
For instance, some financial overseers might work out that in a ward the number of nurses could be cut from 9 to 6 to save money or make more profits… and that’s not the only thing they would be looking at to cut back…
The reports on specific incidents in relation to this are astounding:
Taking the cases of three Connecticut hospitals, Manchester Memorial, Rockville General and Waterbury Hospital. Each hospital had been bought up by private equity backed Prospect Medical Holdings. Staff members of these hospitals had come forward and were interviewed.
From interviewee responses a pattern unfolded. All staff repeatedly said that Prospect Medical Holdings did everything they could to save money, to the point of extremity and in every aspect. Patient care deteriorated as a result of a lack of spending on essential resources.
For example, Romana, a staff member working in an operating room commented on how medical supplies had been halted. The supplies grew scarce, to the extent that the staff were left scrambling to find essential equipment at the operating theatre. There were incidents where some staff ended up purchasing equipment. Staff had also bought food for their patients or otherwise that would have gone hungry…
Anne-Marie has worked as a nurse at Manchester Memorial for more than 3 decades. She told her interviewers that it was the total dedication of her colleagues that kept the hospital from falling apart.
Carmen, working as a secretary at Waterbury Hospital, said that Prospect Medical Holdings ignored advice on maintaining buildings. -Because of the years of neglect, there were incidences where ceilings had literally come apart, resulting in buildings coming down. Fortunately, no one was harmed.
Other appalling conditions had been reported. For instance, in a trauma room, because of structural neglect, buckets had been placed to catch water drips from ceilings at offices where computers were just missing the falling drips…
Patient care deterioration at Waterbury was evidenced by having recorded the highest rates of patient readmissions in Connecticut state 2019.
These three hospitals have now been stripped. They have come to their death and demise: Leonard Green & Partners (who had owned Prospect at the time) had sold off the land where the three hospitals resided as a real estate investment. The leasing company who then took over leased the land at a much higher rate, resulting in “debt and destruction” in the wake of this.
For example, Rockville Hospital started losing so much money that they couldn’t afford to fully take care of their outpatients.
As a consequence, Prospect, still holding on to these hospitals, has filed for bankruptcy.
The future of these three hospitals will now be decided by a Texan bankruptcy judge.
-This scenario is not atypical as it is happening to a number of hospitals all over the United States, as reported by Connecticut Senator Chris Murphy.
In other words, these private equity firms are sucking the life out of hospitals and resources to financially take care of their investors, while patients and affected communities are left stranded.
They then go on to destroy the hospitals.
Wall Street Apes @WallStreetApes made a recent post claiming that in recent times around 50 hospitals nationwide have fallen victims in the above way. No doubt there will be the demise of more hospitals to come.
Finally
When this is allowed to happen, you can be pretty sure that it’s because of a corrupt system. -A case where moral bankruptcy precedes financial bankruptcy.
Nothing is more important than your health. It’s the greatest investment you could ever make, but private equity sees things differently. The politicians allow it to happen because they have an involvement. Welcome to the ‘donor class!’ They bankrupt hospitals and line their pockets with millions of dollars as a result.
Not just with hospitals and healthcare, there are other cases where Private Equity is not your friend.
Take the case of Private Equity’s involvement with the buyout of utilities. The result for the people of America is that their utility bills go up by hundreds of percent, as it has, for example, in California. Then there’s a decrease in energy efficiency, while more blackouts occur, public buildings such as schools have been known to suffer more power cuts…
Private Equity continues gutting the country, while lining the pockets of the select few investors.