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Private Equity Is Now Dominating the US Hospice System
- oldstrangers 3y agoHousing: Check Veterinarians: Check Healthcare: Check Education: Check Hospice? Check Cool.
- toomuchtodo 3y agoFuneral Homes: https://kffhealthnews.org/news/article/funeral-homes-private-equity-death-care/ https://kffhealthnews.org/news/article/funeral-homes-private... Defense: https://responsiblestatecraft.org/2023/03/22/as-private-equity-buys-up-defense-firms-transparency-is-already-suffering/ https://responsiblestatecraft.org/2023/03/22/as-private-equi... Adult content: https://techcrunch.com/2023/03/16/pornhub-owner-mindgeek-sold-to-private-equity-firm/ https://techcrunch.com/2023/03/16/pornhub-owner-mindgeek-sol... Matt Stoller has lots of quality writing on the topic: https://mattstoller.substack.com/p/closing-down-the-billionaire-factory https://mattstoller.substack.com/p/closing-down-the-billiona... https://mattstoller.substack.com/p/why-private-equity-should-not-exist https://mattstoller.substack.com/p/why-private-equity-should...
- rippercushions 3y agoGotta say the irony is strong with a private equity firm called Ethical Capital Partners acquiring porn company MindGeek. I wonder who's fucking who the hardest?
- Aeolun 3y agoIs there anything unethical about porn?
- piperswe 3y agoI don't think there's anything inherently unethical about porn, but quite a bit of porn production involves unethical practices.
- CoastalCoder 3y agoI think the answer depends on one's world view. Historically not the kind of topic that can be debated well on HN.
- lmm 3y agoA lot of institutions name themselves to cover their biggest weakness. It took me a while to realise that the street I lived on a decade ago was called "xyz Gardens" because it didn't have any.
- Obscurity4340 3y ago"Democratic republics" are often neither democratic nor republics
- totetsu 3y agoGretchen Morgensons book The plunders: how private equity runs - and wrecks - America, is also good
- candiddevmike 3y agoGotta find new industries to shuffle around all of their debt: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/private-equity-portfolio-companies-on-track-for-most-bankruptcies-since-2020-74886821 https://www.spglobal.com/marketintelligence/en/news-insights...
- notacoward 3y agoThey sure do love those captive markets, don't they? Very little elasticity or opportunity for substitution, so maximum rent seeking. It would be hard to find a better argument for price controls and/or Pigovian taxes.
- version_five 3y agoI agree that this is concerning. I'd also say that the only thing worse than PE running these would be the government running them (see Canada). This is a natural role for religious organizations (I'm not religious) and I don't know what most logically could take their place that would actually care about people. (Companies sort of have to due to competition, but after profits, governments don't have to care at all). Ideally incentivizing nonprofits to run these and disencentivizing for profit ownership it probably most reasonable.
- funac 3y agoI'm not sure religious organizations (or, at least, the religious organizations which would realistically be involved) have a very good record of running institutions that involve significant power asymmetries
- ska 3y ago> PE running these would be the government running them (see Canada). I know there were a lot of problems in the Canadian system caused by or exposed by Covid, but weren't the worst of them private companies in some sort of private-public deal not, as your wording suggests, the government running them? I may be misremembering. Somewhat like the US state-to-state variability, province-to-province is quite different also I suspect.
- deleted 3y ago[deleted]
- renewiltord 3y agoMeanwhile, the religious organizations in Canada https://www.npr.org/2022/07/25/1113498723/pope-francis-apology-canada-residential-schools-indigenous-children https://www.npr.org/2022/07/25/1113498723/pope-francis-apolo...
- jancsika 3y ago> (see Canada). Thanks, I've never seen intricacies of Canadian health care system explained quite as clearly and succinctly as this. :) I can't help but think of that complete set of Beatles transcriptions where the orchestral build-up in "A Day in the Life" is a single staff titled "Orchestra" with a rising line drawn on it.
- madballster 3y agoWhile that sounds concerning, I have to question the underlying thesis: Does private ownership always short-change customers, like the subtitle insinuates? "hospice agencies are now for-profit, putting profit maximization over patient well-being." Do hotels or restaurants put profit maximization over customer well-being? If they do, they will be out of business rather soon. If the hospices have competition and comparability (for patients or their loved ones) then the same mechanism should work over time.
- efields 3y agoHotels do this, and it’s a race to the bottom. The hotel experience has gotten so bad people accept going days without turndown service now.
- throwaway5959 3y agoThat’s thankfully turning around. We were just in a hotel for a few days and they offered to turndown our room each night which we declined as we don’t really make a mess and it was only two nights.
- version_five 3y agoWould you like to "make a green choice" and have our staff ignore your dying loved one for the day in exchange for a $5 Starbucks gift card?
- mym1990 3y agoOr maybe people want to be left alone in the evening?
- sarchertech 3y agoMy guess is that don’t actually mean turndown service, but just general housekeeping.
- efields 3y ago
- howard941 3y agoLiterally "vulture capitalism."
- crooked-v 3y agoNot literally, unless someone's literally getting eaten.
- taftster 3y agoVultures do more than eat. True, that's one of their functions. But a literal vulture capitalism would have probably included business entities created and maintained by the vultures themselves. They'd probably need an economy, a legal framework for establishing business entities, and a host of other traditional capitalistic structures. They'd have fantastic recycling and decomposition industries.
- bdowling 3y agoThis gives me a great idea for a new hospice startup: To get stated, we'll need a bunch of hospital beds and a flock of vultures.
- TeMPOraL 3y agoLike ${whatever the recent hot startup renting out goats to graze on customers' lawns}, but for hospice care!
- bdowling 3y ago“Like Uber, but for hospice care, our network of independent service providers will transport your loved one to the afterlife(*) cheaper, faster, and in better comfort than traditional services! (*) Afterlife not guaranteed.”
- antod 3y agoVultures wait until you're dead to pick over your bones.
- hammock 3y agoKind of ironic to note that the world is upside down right now. Public companies, which are regulated precisely to protect the financial interests of shareholders, are forgoing profits for the sake of their ESG scores. Meanwhile, private equity, which is not regulated in the same way and theoretically could be more easily managed towards objectives other than profit, are smeared as “profit obsessed.” Wild times
- hotpotamus 3y agoWho's forgoing profits for ESG scores? That would be pretty novel to me.
- hammock 3y agoBecause of the ESG rule* (the repeal of which was the first veto Biden ever used), which allows pension fund managers unprecedented flexibility in their fiduciary duties to choose funds that align with what some see as “woke agenda” goals as opposed to another profit motive, all kinds of public corporations are seeking higher ESG scores, at the expense of profits, so they can stay in these pension funds. It’s controversial because pension managers control over $12 trillion of OPM (other peoples money) in the US, and the great centralization of control of these funds in a few politically connected firms, and have been thus turned into a political instrument of change instead of just a personal returns manager/maximizer. However you want to judge it good or bad, it’s a serious market distortion *The ESG rule—Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights—permits retirement plan fiduciaries, such as 401(k) plan sponsors, to consider climate change and other ESG factors when they select investment options and exercise shareholder rights, such as proxy voting
- hotpotamus 3y agoBut it doesn't sound like it actually happened?
- hammock 3y ago
- koboll 3y agoAlmost any company by definition will be 'profit-obsessed'. The solution is smart regulation that prevents abuses. Public hospice agencies would come with their own set of constraints that enable different kinds of bad behavior; I don't exactly trust Jacobin to dispassionately judge whether those are better than a well-regulated private industry could be.
- LightBug1 3y agoNah, private equity is a different beast than "any company". 1) Normal business: how can we innovate such that we maximise profit off the back of a decent product. 2) Private equity: how can buy this company with as much debt in its own name while extracting as much resource as we can via dividends.
- rhaway84773 3y ago(2) isn’t private equity. Private equity simply means funds investing in private, not public, firms. In fact, if you look at other comments people post about how companies are terrible because they have to please shareholders, private equity actually solves that problem. What you’re talking about is LBOs (leveraged buyouts) which are a certain kind of private equity investment.
- Aeolun 3y ago> private equity actually solves that problem Private equity firms still try to please their shareholders, they’re just not beholden to a public stock price.
- 1_1xdev1 3y ago(2) is how private equity tends to operate. You’re correct about the definition. And, no, lbos are the buyer borrowing a lot to buy another company, while using the assets of the acquisition as collateral. The debt is still in the buyer’s name AFAIK (may be wrong)
- xg15 3y ago> private equity actually solves that problem. How does it solve that problem?
- renewiltord 3y agoAll that’s happened is that traditionally hyper-regulated industries with high margins are now being eaten by capital. It was to be expected. Every time you create an arbitrage opportunity, someone will come to eat it. So when you create a pharma arbitrage opportunity, we’ll buy compounding pharmacies. When you create a housing arbitrage opportunity, we’ll buy houses. When you create a palliative care arbitrage opportunity, we’ll come for your hospices. Up to you what you want to do, but if you create a regulatively protected job, that’s an arbitrage opportunity. And finance will come for it. You can try to use social power by complaining in the news, but money talks louder. The old world where you could gasp your way into holding on to your mega profitable business by trying to use shame as a shield is over. I don’t have shame, you see, and no amount of online kicking and screaming and downvoting will change it. Not today. Not tomorrow. Shame has no currency.
- fallingfrog 3y ago"arb"? Honest question, I don't know what that means.
- Jgrubb 3y agoArbitrage maybe? Like, the tendency of markets to arbitrage profit margins downward unless a company has some kind of moat? In this context it's kind of confusing (maybe like "to be arb'd"?) and I might be totally wrong!
- renewiltord 3y agoSorry, arbitrage opportunity. Correcting.
- skinnymuch 3y agoWhat was the old world where things were diff?
- akvadrako 3y agoIt was less "efficient", so plenty of lower hanging fruit to find arbitrage opportunities means others could get away with more.
- SoftTalker 3y agoPretty much every facet of any business that deals with the elderly is an attempt to siphon off any wealth they have, and then any benefits they may qualify for, before they die. This includes healthcare, retirement communities, assisted living, nursing homes, hospice, AARP, long-term care insurace, all of it. Stay as far away as you can.
- sacnoradhq 3y agoIt's literal vulture capitalism: not just content to extract value by liquidating the needs of society, but to extract from dying people. Also, illness in the US is still the number 1 cause of bankruptcy. Only America thinks so little of people that they threaten the dying with destitution and homelessness.
- recursivedoubts 3y ago> Only America thinks so little of people that they threaten the dying with destitution and homelessness. Americans are, for the most part, a kindly and trusting people, happy to help out complete strangers. America is a shit show run by sociopaths. It is important to disambiguate these two things.
- mschuster91 3y agoOr rather, admittedly from an European POV, Americans seem to be kindly, trusting and helpful towards members of their own sub-group, and quite the contrary to those they deem "lesser" in status - the poor, the disabled, people of color. That makes it all the easier for rich vultures to pit Americans against one another - to the tune of it being the subject of a very valid joke: > A banker, a worker, and an immigrant are sitting at a table with 20 cookies. The banker takes 19 cookies and warns the worker: "Watch out, the immigrant is going to take your cookie away."
- rippercushions 3y ago> Americans seem to be kindly, trusting and helpful towards members of their own sub-group, and quite the contrary to those they deem "lesser" in status - the poor, the disabled, people of color. As a European, I can assure you we share these traits. Try asking one how they feel about local Romani, African or Syrian refugees, foreign beggars, etc.
- fallingfrog 3y agoYou know I've driven by a hospice center near my home and I'm always struck by how drab and boring it looks. It looks like a bank or a branch of the DMV. It's sad to me that that is the kind of value we place on our elders. Shouldn't they spend their last days in a place of beauty? Sculptures, gardens, a frog pond, anything. Not this boring grey cube. It's so sad.
- wombatpm 3y agoNo one needing hospice care is up walking around enjoying the outdoors.
- zdragnar 3y agoIt'd sure be nice to see through a window from your bed, though, or to share a stroll with a family member if you can get into a wheel chair.
- deleted 3y ago[deleted]
- dghlsakjg 3y agoA ton of hospice is actually done in home. Is this just a base of operation for hospice workers who are doing home visits?
- hammock 3y agoIs hospice just slow euthanasia? My experience is they give you successively higher doses of morphine until your body fails, over like 2-6 weeks
- sschueller 3y agoA dead patient is probably not as profitable as a continously dying one. These vultures will probably try to keep these poor people alive as long as they have money to spend and then kill them off when there is nothing left to collect.
- deleted 3y ago[deleted]
- unyttigfjelltol 3y agoIt's palliative care for people at end of life. Morphine in this context is no more euthanasia than allowing the ill and infirm to make peace with their loved ones and emotionally accept their fate.
- golemotron 3y agoI guess ex-Presidents get an extension: https://www.latimes.com/world-nation/story/2023-05-23/jimmy-carter-3-months-into-hospice-is-aware-of-tributes-enjoying-ice-cream https://www.latimes.com/world-nation/story/2023-05-23/jimmy-...
- arp242 3y agoIt really just depends on the illness and how it progresses, which is hard to predict. Both my grandparents died of cancer; my grandmother spent close to a year in a hospice, using quite a lot of morphine, slowly fading away, while my (otherwise fit and active) grandfather went from "I've got a stomach ache, better see a doctor" to "dead" in about two weeks.
- sleepybrett 3y agoLife is slow euthanasia.
- daxfohl 3y agoIs there a way to invest in stuff like this? What kind of returns do you get?
- Aeolun 3y agoStart a company, get a care home to buy itself and give itself to you, then profit! The returns are exactly what you make of them.
- version_five 3y agoNo, because it's private equity. As I said in another comment, public markets are effectively for dumb money, so they'll let anyone invest because they're essentially set up to take advantage of investors. Private investment means investing on your own, and is what "sophisticated" investors with a lot of money do.
- missedthecue 3y agoYou have to be an accredited investor AKA millionaire but yes you can invest in these funds and the returns aren't too bad, though they've come down as the number of buyout firms has exploded. Too much competition for deals now. The best way to make a buck in private equity these days is probably to start businesses and sell out to greedy buyers ASAP. Buying laundromats got really big in the past few years and I knew of a guy who started over 20 of them and sold them to idiots.
- dagw 3y agoSure. Just talk to your wealth manager or private banker, they'll be happy to help you ;)
- Aeolun 3y agoI still don’t get how a leveraged buyout is legal. It’s like the bank giving you a bunch of money and saying “don’t worry about returning it, someone else will pay it off”.
- lmm 3y agoFundamentally no different from buying a house on a mortgage - the loan is secured against the house, and if you don't repay it then the bank can seize the house but can't (at least in some states) come after you. (The difference is that humans generally try to repay their mortgage even if defaulting would be financially better for them, whereas corporations have no such scruples)
- ethbr0 3y agoThe difference is that in personal mortgages the house isn't expected to be cash flow positive. The bank extending a residential mortgage is securing against default with the asset (house), but they're guaranteeing the income stream (mortgage payments) against the buyer's income. With a leveraged buyout, you potentially impinge the company's ability to generate cash (with additional debt payments and dividends)... which gets back to the parent's point about borrowing someone else's money.
- lmm 3y ago> The bank extending a residential mortgage is securing against default with the asset (house), but they're guaranteeing the income stream (mortgage payments) against the buyer's income. They're not, because they have no recourse against the buyer. > With a leveraged buyout, you potentially impinge the company's ability to generate cash (with additional debt payments and dividends)... which gets back to the parent's point about borrowing someone else's money. Well a mortgage is even more so by that logic, since the house has no income stream of its own.
- khuey 3y ago> They're not, because they have no recourse against the buyer. That depends on which state you're in.
- tmaly 3y agoWow this just sounds downright aweful. I had a friend that went through hospice. Having caring staff that was empathetic to the families is an important part.
- syngrog66 3y agoThis sounds exactly like the kind of phenomenon I should have in the dystopic, dark comedy future adventure game I'm building. (Imagine Idiocracy crossed with Fallout and HHGG. see my bio here if curious.)
- dbg31415 3y agoIf you have elderly parents, do what you can to be involved with their lives. There are so many scammers! So many companies looking to milk the elderly for all they can. It's beyond disgusting, and it happens DAILY. Simple things... man I don't even know, teach your elderly parents not to trust anyone. Only going to get harder with AI here. From an old comment. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=dbg31415+airline&sort=byPopularity&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... > I hate all the different ways companies target people. > I recently booked flight on American Airlines for my 80+ year-old father. I requested the golf cart to take him between gates. > Immediately I got a call from "American Airlines Health Alert." > They made it sound like there was an issue with the booking... "An important health alert related to your flight." And there was a "Press 1, if you're over 50" option. > Anyway long story short it was some shady marketing company selling me a panic button in case of falls. > The lady was like"these are very expensive devices"... "we'll give you the device... but you pay a small fee for monitoring every month." > Clearly she'd given the pitch 1,000 times. Didn't give me any time to talk. Finally, I was like, "Hey is there a problem with my Dad's flight, or are you just trying to sell me something?" And she hung up on me. > Fuck American Airlines. Fuck all the airlines really, but it should be illegal to target the elderly just because they asked for help with connection flights.
- emodendroket 3y agoNot an elder-targeted scam but I rented a car a while ago and I'm at the airport, obviously eager to just get into my car and leave, and the guy working the register asked me "you just want the basic coverage, right?" Oh yeah, sure, I said, not really thinking, and I was billed as much as the cost of the rental for insurance coverage I hadn't needed and would have declined if he asked me in a less misleading way. I hope that guy at least gets a commission for that trick.
- thelastgallon 3y agoThis is not new, 14 year old video: Bruce Wasserstein: Gouging Grandma: https://youtu.be/bcsxGxzrTsc https://youtu.be/bcsxGxzrTsc
- jmyeet 3y agoThere's a quote attributed to Winston Churchill [1]: > As King put it: "Winston Churchill once famously observed that Americans will always do the right thing, only after they have tried everything else." In my experience, America does tend to have this blind spot where everything but the blindingly obvious is blamed and we throw our hands up saying "there's nothing we can do" for problems literally no one else has. The problem here is capitalism. We need more government, not less. The Church of Quasi-libertarianism and deregulation simply does not work. Shelter is one of our basic needs to survive. There is absolutely no reason why the richest nation in the history of the Earth cannot put a roof over the head, provide sufficient food and give access to clean water to every man, woman and child in this country. None. It's a choice not to. The insidious part of our capitalistic cult is how insidious it is. Every aspect of our lives becomes financialized. Debt is built into our existence: housing, student, medical. It's the chosen method of control where once it was fealty to a monarch and whoever your local vassal lord was. Mark Fisher once said [2]: > it is easier to imagine an end to the world than an end to capitalism But no, the problem is going to be anything else. [1]: https://www.npr.org/sections/itsallpolitics/2013/10/28/241295755/a-churchill-quote-that-u-s-politicians-will-never-surrender https://www.npr.org/sections/itsallpolitics/2013/10/28/24129... [2]: https://en.wikipedia.org/wiki/Capitalist_Realism https://en.wikipedia.org/wiki/Capitalist_Realism
- midoridensha 3y agoThe problem isn't "capitalism". Every developed nation is capitalist, including China. And more government isn't the answer either (nor is less government); what's needed is better government. America's governmental system is uniquely badly designed and broken. Adding more civil servants isn't going to fix things, just like you can't make a rowboat go faster by adding more rowers who are rowing in the wrong direction or not even rowing or harassing the people who are rowing.
- pcurve 3y agoFor our non-American friends on the board, check out how much Nursing home costs in the U.S. by state. https://www.seniorliving.org/nursing-homes/costs/ https://www.seniorliving.org/nursing-homes/costs/ I'll save you the click. It's $100,000 / year. ($350,000 if you're unfortunately to be in Alaska)
- jti107 3y agodamn...something to look forward to i guess
- philjohn 3y agoUK isn't much better. 10 years ago when my grandmother went into an, admittedly VERY nice, private home and the fees were £1000 a week.
- tstrimple 3y agoHalf the average US cost for a VERY nice place sounds a lot better actually.
- blinzy 3y agoWhen you take into consideration the median household income for both countries, the difference isn't as great as it sounds: - US: ~$70,000 (source: https://www.census.gov/library/publications/2022/demo/p60-276.html https://www.census.gov/library/publications/2022/demo/p60-27...) - UK: ~32,000 (source: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2022 https://www.ons.gov.uk/peoplepopulationandcommunity/personal...)
- 93po 3y agoTo be fair, a third of that is probably just the expense of rent. $66k remaining is $180 a day for the nursing care on top, which seems pretty reasonable aside from the messed up dynamics of medical care in general.
- chris-orgmenta 3y ago[dead]
- _siis 3y agoOf course they are, all the money the boomers were planning to leave to their kids are now going to pay for quality not quantity of life in the remaining time they have.
- xg15 3y agoCould someone explain to a total finance noob how a "leveraged buyout" transaction actually works? I think I understand how hostile takeovers work for public companies (thanks to Elon's helpful demonstration of the concept) : Basically, a buyer can "acquire" the company against the wishes of the company's management because the company doesn't "own" itself in the first place. The real "owners" are the shareholders and so the two parties of the transaction are really the buyer and the shareholders, not the company that is being bought. Consequently, the buying price goes to the shareholders, not the company. However, here we're talking about acquisition of private companies - so there are no shareholders. Then who exactly is the "seller" party in the transaction? It could be that the hospice was owned by itself and the board members just got greedy. However, tge article implies that the bulk of hospices before consolidation were small, local businesses. I have a hard time believing that the owners of all those shops suddenly decided to throw the wellbeing of their employees and patrons in the wind for some personal riches. On the other hand, if the hospices were not owned by themselves then there already must have been some sort of corporate structure before that the PEFs latched on to. But then, what was that. In short, the "leveraged buyout" is an acquisition where it seems completely clear even beforehand that the acquired company will be strictly worse off afterwards. So why would a private company agree to that or, if not, who can make them agree? And who is the buy price paid to anyway?
- notacoward 3y agoNot an expert by any means, but I see nobody else has answered so I'll give it a shot. In the less extreme case, the seller has no choice but to sell or go under, so they'll take the best offer they can get. In the more extreme case, there is no choice because the seller has already taken on some debt under conditions that give the creditors first claim on assets. Then it's easy for the rentiers to buy up the debt and then wait - usually not long - for the company to run out of operating funds and trigger their own effective acquisition. I once worked at a startup that suffered a similar fate. They had taken on some debt - a small amount really - during desperate times. Later, before the debt was paid off, they ran out of operating funds. Boom. Game over. The company shut down, most employees were immediately let go except for a few charged with liquidating the assets and wrapping up all the IP which went into storage somewhere never to be used again. It sucked. That creditor probably made a tiny bit more than they had loaned originally, while everyone else lost. And the only way their own business model worked was to do the same thing over and over and over again, destroying enough aggregate value that even the residue they skimmed off the top could pay for their yachts or third vacation homes.
- 0x445442 3y agoMy wife is a hospice nurse and she is constantly at odds with her company over admitting non appropriate patients. The industry is rife with fraud with “marketers” selling people who are looking for free home health care on hospice benefits. However, this forces nurses and doctors to lie about patients in order to avoid scrutiny by Medicare. The evil part is there’s a cap on patients aggregate benefits and those often get used up before they are end of life. Then, when they are end of life and appropriate for benefits they don’t have any left. I told her she should go work for the Medicare fraud division.
- tilolebo 3y agoI care a lot
- specialist 3y agoA friend was temp CFO for an assisted living corporation for 2 years. He also teaches finance for an MBA program. He takes these short-term roles to inform his teaching. Afterwards, I asked him what he had learned. "I learned to never end up in a nursing home."
- throwawaymanbot 3y ago[dead]