4 ms·
"The data revealed a troubling trend: when private-equity firms acquired nursing homes, deaths among residents increased by an average of ten per cent."
by sebg 4y ago
"The data revealed a troubling trend: when private-equity firms acquired nursing homes, deaths among residents increased by an average of ten per cent."
- deleted 4y ago[deleted]
- ptsneves 4y agoThat is why, as per [1] the hammer is about to fall on private equity and it's total finantialization of markets. The finantialization per-se is harmful as per the quote, but the worse is that there are often board members seating on competing enterprises, which is kind of incredible that it is possible. [1] https://www.ft.com/content/e9cc796e-351c-462b-8b72-e9e3c5bdd2fe?emailId=6302ff20b5c87000235714d1&segmentId=22011ee7-896a-8c4c-22a0-7603348b7f22#comments-anchor https://www.ft.com/content/e9cc796e-351c-462b-8b72-e9e3c5bdd...
- missedthecue 4y agoHow does one "financialize" a nursing home? When people talk about the financialization of corporate America, they're usually talking about how GE and Caterpillar went from being manufacturing companies to being lending companies that also manufacture stuff. Or how airlines turned from transportation companies into banks that fly for a side-gig. I will note that private equity was involved in none of these situations.
- ptsneves 4y agoIt does by the fact that private equities are purely financial institutions with massive economic and legal leeway, able to buy all the nursing homes. From a market perspective that already creates a distortion, which is the point of the article i linked. On top of that, financialization is counter to the social aspects of nursing home. Support or quality of life improvements of their users is marked as expenses, while from a social perspective they are gains. Furthermore the service is not very elastic as many people just do not have an alternative but to require nursing home services. The alternative being they load working age relatives, externalizing the costs. In many countries to open a company you set it up as a social contract, where society allows you to open a business because it believes it improves society. If it does not, it will not take long for the law or lawmakers to come after you. That seems to be the case.
- deleted 4y ago[deleted]
- iso1631 4y agoThat is troubling, if they die, they aren't paying money, it's bad for profits Better to keep them barely alive with the minimum funding possible
- koheripbal 4y agoTheoretically, if they increased profits per tenant by 30% a 10% reduction in tenants would still equate to a 20% increase in profit.
- deleted 4y ago[deleted]
- rdtwo 4y agoNah dead tenants just get replaced with live ones. Minus minor acquisition costs they probably make like 28% more
- iso1631 4y agoIf there's more supply you could expand. The ideal situation from the owner point of view is you extract the entire net worth of the tennant and then move them on (coffin or just kick them out), while at the same time spending the least amount possible. You don't want them dying too quickly as that's leaving money on the table, but you don't want to have to evict them once they run out of money Bonus points if you can extract money from relatives too
- 11101010001100 4y agoI believe that's what they are doing, with an acceptable error rate.
- spaetzleesser 4y agoYou can increase your rates and wait until people have lost all their money. then it's more profitable to have people dying.