Private Equity and Health Care

Health care in the United States was the world’s most expensive even before private equity became involved. Now it’s even more expensive and the quality of care has declined. When private equity enters any sphere of business activity, it’s a given that services and products will be impacted negatively. After all, private equity is a format for wealthy individuals to make more money in new businesses on the backs of workers and consumers. It’s true for health care just as it is for other private equity investments.

There were only 24 private equity firms in the United States in 1980, but their investments have proven to be so successful that the number of private equity firms has soared. About 5000 private equity firms controlling approximately 18,000 companies were noted in 2022 and continued growth can be expected. There is not strict monitoring and regulation by government entities, allowing private equity firms to literally strip companies of whatever value they had.

Initially, private equity firms would buy firms that were financially troubled or borderline. They would then pay themselves a hefty fee to manage these firms and make them appear solvent again. Cutting workers and services were ways to curb spending and make financial spreadsheets look better. Usually, they would accrue debt to pay their management fees and temporarily enhance the company. Then when the time was right, they would sell the firm to other investors at a significant profit, leaving a shell of a company that was buried in debt. But the private equity company did well financially.

For a number of years now, they have used this format to buy up companies involved in health care, particularly nursing homes. There is a manifest conflict of interest between private equity firms whose primary goal is to make money for their investors and health care facilities whose aim is to care for patients and provide them with the best services possible. Doing what is best for patients entails having more than adequate personnel on duty around the clock. In addition, facilities must have the best technology available for medical testing and be able to provide the most effective medications to treat various conditions, even if the meds are expensive.

Nursing homes care mainly for elderly patients, many of them demented and with multiple medical conditions. Because the patients are so fragile and sick and often not capable of lucid complaints, the owners of many nursing homes feel they can get away with stinting on adequate care for them. Personnel may often be cut to a bare minimum at some of these units, appropriate testing not done, nor expensive medications given. And when the Covid-19 pandemic hit, private equity nursing homes were unprepared for the influx of new patients. Mortality in private equity nursing homes has been shown to be over 10 percent higher than in other nursing homes.

Aside from nursing homes, private equity has also been buying urgent care centers, hospital emergency rooms, radiology departments and ICUs. The private equity firms make money the same way they do with nursing homes and other investments. They cut staff, including doctors, nurses, aides and so forth, get patients out quickly, and don’t give expensive medications. For profit entities like private equity should have no roles to play in the delivery of health care in any type of unit. Health care decisions should be made on the basis of necessity, not to generate or save money.

www.robertlevinebooks.com

Buy The Uninformed Voter

Give It Up, Joe

Give It Up, Joe

            Robert A. Levine    July 2, 2024

There comes a time when you must know, or your family and friends tell you, that you’re on a downhill slope and no longer should play a political role if you’re a politician. It could be illness, age, cognitive decline, or merely lack of interest. But you longer have the power to focus on the problems of the nation or your constituents. Or maybe it’s just difficulty in communicating well, so the public loses confidence in your abilities. It’s not only true in politics but in any leadership roles, in business, the military, education, and so forth. But when you have an important position in the government and the nation is watching, your demeanor and cognitive function is even more significant. For the country to run well, the public must believe in your intelligence and abilities.

Unfortunately, President Biden’s family and friends have been unwilling to tell him that it’s time for him to throw in the towel; that he no longer has the mental sharpness and physical attributes to continue as president for another term. His close staff and family have been keeping him in a protective shell, trying to build up his confidence so he will continue his quest for a second term. However, Biden’s performance in the recent debate means that Donald Trump is a prohibitive favorite to win the election if Biden stays in the race, to the detriment of the nation and of the Democratic Party.

If a person in a leadership role is unaware that he is not functioning maximally, it is up to those close to him or her to alert that person about his or her deficiencies. A leader must know about his or her performance. Biden’s family and close associates have not been straight with him. His expert team should be telling him to drop out of the race instead of bolstering his ego and affirming that he is doing well. Constant praise of his efforts gives him a false sense of security about his efforts on the campaign trail. For the good of the nation, Biden must know the truth no matter how much pain it causes.

The New York Times editorial board and a horde of journalists have urged Joe to drop out of the race after his dismal performance during the debate. Major donors are questioning whether it is worthwhile supporting him financially. Democratic politicians are publicly supporting him and privately lamenting his candidacy. It wasn’t just one bad night that has raised questions about Biden. Physically, it appears as if he has some neurologic impairment, with a lack of facial expression, soft voice, stiff gait. Some of these signs are suggestive of possible Parkinson’s disease or one of its variants. He did well in the State of the Union address and in some campaign speeches when he is able to read from a teleprompter. But he has much more difficulty when he must answer questions spontaneously. That’s why he and his staff are reluctant to have him do press conferences or one on one interviews.

During the debate, Trump lied constantly and gave false information but was not taken to task by Biden or the moderators. Not only domestically, but internationally, allies and supporters were dismayed by Biden’s performance. Seeming lethargic, he was not a good representative of American strength and vitality. Whether he is and will be able to handle the duties of the presidency from a cognitive standpoint is unimportant. Perception matters in the role of president, and he appeared unable to do the job. For the good of the nation, he must drop out of the presidential race and leave the choice to an open Democratic Convention. Give it up, Joe. Give it up!

www.robertlevinebooks.com

Buy The Uninformed Voter on Amazon or Barnes and Noble.