7 ms·

Hospitals owned by private equity are harming patients, reports find

205 points by lapcat 3y ago

adrr 3y ago
Are they buying the hospitals or the staff firms? Maybe ban non-profit hospitals from using staffing firms or they lose their non profit status. Does kaiser use staffing firms?
- bullfightonmars 3y ago
  Ban non-profit hospitals all together.
  - smileysteve 3y ago
    B corps and mutual corporations would be best. Then they have to answer "are we helping the patient" before they grow and expand rather than monopolistically expand while taking gigantic tax deductions.
  - 650REDHAIR 3y ago
    Why?
  - paulryanrogers 3y ago
    Did you mean "ban for-profit hospitals all together"?
toss1 3y ago
So, the article lists exact counts of the Private Equity Owned hispitals. Is there a lost of them so that we can avoid them? Seems the first reasonable thing to do. Not so much naming-and-shaming, as providing information so that individuals can make their own market decisions.
leotravis10 3y ago
Related: https://news.ycombinator.com/item?id=39056824 https://news.ycombinator.com/item?id=39056824 (HN: Venture capital firm General Catalyst to buy Ohio health system Summa Health) https://www.axios.com/2024/01/17/summa-health-ohio-general-catalyst?stream=top https://www.axios.com/2024/01/17/summa-health-ohio-general-c...
locopati 3y ago
Private equity and hedge funds should not be allowed to own public goods like hospitals or housing.
- jwsteigerwalt 3y ago
  [flagged]
  - aaomidi 3y ago
    Why? PE owning healthcare is especially problematic because nickel and diming on healthcare is playing with actual lives.
    - edgyquant 3y ago
      Im not sure I agree with the poster but the argument is something like, “hospitals who kill people receive less business under a free market. Under a regulated one there is less competition for people to choose from.”
      - gamepsys 3y ago
        Health care is one of the most regulated markets. Seems like a good portion of the regulation is about capturing profits for shareholders.
      - woodruffw 3y ago
        I don't think medical care is particularly well modeled as a market: it's not clear that a small town hospital really can have any competition, or that someone in an active medical emergency has any meaningful choice about which hospital they get sent to. Similarly for specialty treatment.
        jliptzin 3y ago
        Also it’s not clear where someone would even look up those statistics even if they had the time to do it
edgefield 3y ago
Can anyone provide a single case of where a private equity majority owned business thrived, expanded, or at least maintained market share for at least three years? It seems private equity focuses on extracting every bit of value from a business, as quickly as possible, and then walking away via asset divestiture and bankruptcy.
- nashashmi 3y ago
  What do you think about Dell? PE bought Dell.
  - kevingadd 3y ago
    Based on the reviews I've seen, the buying experience with Dell is a joke now and their computers are overpriced underperformers
  - aaomidi 3y ago
    Dell is awful
- calamari4065 3y ago
  Yes and no. The hospital in my hometown is owned by PE. The situation is bad but they still exist, and are still the only hospital without driving half an hour to 'the big city'. I haven't been in that loop since before covid, but last I heard they were running at a loss for years because they couldn't keep staff. The conditions (and pay) were abhorrent. They also really, really liked to buy entire practices from the most experienced doctors. The practice got absorbed and died quietly while the doctor would very understandably retire early or move far away. So, yes, they've maintained market share. But only by virtue of being a natural monopoly.
  - FireBeyond 3y ago
    > are still the only hospital without driving half an hour to 'the big city'. By design. Look up Certificates of Need. They are an application a prospective new hospital needs before breaking ground, to make sure an area isn’t “overserved” by hospitals (i.e. protecting profits). Certificates of Need were lobbied for by … drumroll … hospital owners.
duffpkg 3y ago
Wrote Hacking Healthcare, operated/managed hospital systems, blah blah. The study being referenced here is https://doi.org/10.1001/jama.2023.23147 https://doi.org/10.1001/jama.2023.23147. The conclusion of the study is that the identified set of hospitals performed worse on some key metrics, hospital acquired infections are in my opinion a pretty good bellweather of other problems. However, what they are defining as "private equity" seems to be pretty amourphous. Most of the studied hospitals were in private ownership that a lot of people would call "private equity" and then bought by different "private equity". I previously was involved in ownership and management through my company ClearHealth, of some of the facilities studied. Most people would identify that ownership as "private equity". I don't dispute that the hospitals seem to be performing worse after the ownership change (after our interests were divested in 2017-2020). As "private equity" we took over operations and management of many facilities of both public and private ownership and made them run really a lot better for both patients and owners, we were very very good at doing that. Bottom line there are a lot of very incompetently run facilities out there, of both private, "private equity" and various form of public ownership/management. It makes a great headline to say that a hospital can be "bought" but ownership and management of hospital systems takes a book to explain. Outside entirely vertical systems like Kaiser and even that has some complexity, hospitals are much more like medical malls than anything else. An ownership and or management company does not dictate what happens under their roofs in anything like the manner a private corporation like Coke, GE or Google would. 29 states make it outright illegal for non-licensed persons to own or manage an entity that engages in the practice or medicine. Most hospitals of any size over 100 beds involve at least dozens of seperately controled and managed entities. See "corporate practice of medicine (CPOM)" laws. Finally I would add that measuring outcomes on an apples to apples basis is more or less an impossible thing to do. Lots of people don't like to hear that. Again something like HAI I think can be a useful general indicator as well as other measurements of preventable complications, but comparing outcomes at different facilities especially across size and location is more or less useless.
- Madmallard 3y ago
  Overworking doctors and understaffing to save money and any cutting corners being done is something that should be outlawed, rigorously inspected and investigated constantly. At every single hospital system I've been at in the last 10 years, which is several due to chronic health issues, there definitely needed to be at a minimum 2x as many working staff as there are. There's really not excuse other than corporate greed going on here. Profit margins should not be the bottom line in a life saving institution. It is destroying society from the inside out.
steve76 3y ago
[dead]
diogenescynic 3y ago
The staff are miserable at them. I know someone who works at one of these and they can barely keep staff employed. As a result, the quality of care suffers.
- ProllyInfamous 3y ago
  >"WhY dO We `haVe` to pAY tRaVELiNg NUrSeS SOOoOOO mUCh?!?" Because you refuse to employ full-time staff at reasonable salaries, thus encouraging more nurses to become "travelers" getting paid 5x+ on short-term, renegotiable contracts. When un[der]appreciated nurses find out that their hospital sucks (after having literally been bled dry of funding, talent, and ability to provide actual healthcare), it is a quick revolt into contract nursing. I LOVE NURSES. To make a nurse hate you, is not an impossible task dear Healthcare Admin.
seatac76 3y ago
I know PE can act as vultures and clean up dead companies sometimes, but aside from that what good has PE done? Doesn’t the negative greatly outweigh the positive. What mechanism exists (in the U.S) to deal with this excess?
- dragonwriter 3y ago
  The excess (the externalization of harms to the general public and thr concentration of benefits in the capitalist class) is exactly the point of capitalism (as in, the reason the former mercantile class fought the established aristocracy for the system of features that eventually had the name “capitalism” applied to it by its critics, not as in the backward-looking idealized rationalization invented by the system’s defenders to counter critics later.) The US (like most modern mixed economies, as much of the developed world has moved beyond pure capitalism) has a few features (progressive income taxation, some taxation of property and luxuries, schemes of redistribution supported by those) to slightly mitigate that excess, but its still a central feature of the system on which elites rely and which they aggressively defend.
  - JumpCrisscross 3y ago
    > excess (the externalization of harms to the general public and thr concentration of benefits in the capitalist class) is exactly the point of capitalism That excess production is also called improving living standards.
    - dragonwriter 3y ago
      The excess being referred to is not the excess of production but the excess of negatige externalities over positive externalities, which is very much not “improving living standards”.
- cjbgkagh 3y ago
  They capture more consumer surplus so the better they are at their job the worse off you are as a consumer. Where the market price is close to the marginal utility it barely matters if the company survived to continue to provide the product or service. In my view what makes a product like the new Edison Motors EV Semis revolutionary is not the technology but saying no to more money and leaving consumer surplus on the table for the benefit of their customers. It’s hard to say no to more money.
anonuser123456 3y ago
[flagged]
- cnewey 3y ago
  What about being from a union advocacy group detracts from the findings of the study? What about the study makes you think it’s poorly run?
- worik 3y ago
  Really? https://pestakeholder.org/ https://pestakeholder.org/ authored the report. A "union advocacy group"? JAMA is the Journal of the American Medical Association. Methinks you are too quick to dismiss this

205 points by lapcat 3y ago

adrr 3y ago

Are they buying the hospitals or the staff firms? Maybe ban non-profit hospitals from using staffing firms or they lose their non profit status. Does kaiser use staffing firms?

bullfightonmars 3y ago
Ban non-profit hospitals all together.
- smileysteve 3y ago
  B corps and mutual corporations would be best. Then they have to answer "are we helping the patient" before they grow and expand rather than monopolistically expand while taking gigantic tax deductions.
- 650REDHAIR 3y ago
  Why?
- paulryanrogers 3y ago
  Did you mean "ban for-profit hospitals all together"?

toss1 3y ago

So, the article lists exact counts of the Private Equity Owned hispitals. Is there a lost of them so that we can avoid them? Seems the first reasonable thing to do. Not so much naming-and-shaming, as providing information so that individuals can make their own market decisions.

leotravis10 3y ago

Related: https://news.ycombinator.com/item?id=39056824 https://news.ycombinator.com/item?id=39056824 (HN: Venture capital firm General Catalyst to buy Ohio health system Summa Health) https://www.axios.com/2024/01/17/summa-health-ohio-general-catalyst?stream=top https://www.axios.com/2024/01/17/summa-health-ohio-general-c...

locopati 3y ago

Private equity and hedge funds should not be allowed to own public goods like hospitals or housing.

jwsteigerwalt 3y ago
[flagged]
- aaomidi 3y ago
  Why? PE owning healthcare is especially problematic because nickel and diming on healthcare is playing with actual lives.
  - edgyquant 3y ago
    Im not sure I agree with the poster but the argument is something like, “hospitals who kill people receive less business under a free market. Under a regulated one there is less competition for people to choose from.”
    - gamepsys 3y ago
      Health care is one of the most regulated markets. Seems like a good portion of the regulation is about capturing profits for shareholders.
    - woodruffw 3y ago
      I don't think medical care is particularly well modeled as a market: it's not clear that a small town hospital really can have any competition, or that someone in an active medical emergency has any meaningful choice about which hospital they get sent to. Similarly for specialty treatment.
      - jliptzin 3y ago
        Also it’s not clear where someone would even look up those statistics even if they had the time to do it

edgefield 3y ago

Can anyone provide a single case of where a private equity majority owned business thrived, expanded, or at least maintained market share for at least three years? It seems private equity focuses on extracting every bit of value from a business, as quickly as possible, and then walking away via asset divestiture and bankruptcy.

nashashmi 3y ago
What do you think about Dell? PE bought Dell.
- kevingadd 3y ago
  Based on the reviews I've seen, the buying experience with Dell is a joke now and their computers are overpriced underperformers
- aaomidi 3y ago
  Dell is awful
calamari4065 3y ago
Yes and no. The hospital in my hometown is owned by PE. The situation is bad but they still exist, and are still the only hospital without driving half an hour to 'the big city'. I haven't been in that loop since before covid, but last I heard they were running at a loss for years because they couldn't keep staff. The conditions (and pay) were abhorrent. They also really, really liked to buy entire practices from the most experienced doctors. The practice got absorbed and died quietly while the doctor would very understandably retire early or move far away. So, yes, they've maintained market share. But only by virtue of being a natural monopoly.
- FireBeyond 3y ago
  > are still the only hospital without driving half an hour to 'the big city'. By design. Look up Certificates of Need. They are an application a prospective new hospital needs before breaking ground, to make sure an area isn’t “overserved” by hospitals (i.e. protecting profits). Certificates of Need were lobbied for by … drumroll … hospital owners.

duffpkg 3y ago

Wrote Hacking Healthcare, operated/managed hospital systems, blah blah. The study being referenced here is https://doi.org/10.1001/jama.2023.23147 https://doi.org/10.1001/jama.2023.23147. The conclusion of the study is that the identified set of hospitals performed worse on some key metrics, hospital acquired infections are in my opinion a pretty good bellweather of other problems. However, what they are defining as "private equity" seems to be pretty amourphous. Most of the studied hospitals were in private ownership that a lot of people would call "private equity" and then bought by different "private equity". I previously was involved in ownership and management through my company ClearHealth, of some of the facilities studied. Most people would identify that ownership as "private equity". I don't dispute that the hospitals seem to be performing worse after the ownership change (after our interests were divested in 2017-2020). As "private equity" we took over operations and management of many facilities of both public and private ownership and made them run really a lot better for both patients and owners, we were very very good at doing that. Bottom line there are a lot of very incompetently run facilities out there, of both private, "private equity" and various form of public ownership/management. It makes a great headline to say that a hospital can be "bought" but ownership and management of hospital systems takes a book to explain. Outside entirely vertical systems like Kaiser and even that has some complexity, hospitals are much more like medical malls than anything else. An ownership and or management company does not dictate what happens under their roofs in anything like the manner a private corporation like Coke, GE or Google would. 29 states make it outright illegal for non-licensed persons to own or manage an entity that engages in the practice or medicine. Most hospitals of any size over 100 beds involve at least dozens of seperately controled and managed entities. See "corporate practice of medicine (CPOM)" laws. Finally I would add that measuring outcomes on an apples to apples basis is more or less an impossible thing to do. Lots of people don't like to hear that. Again something like HAI I think can be a useful general indicator as well as other measurements of preventable complications, but comparing outcomes at different facilities especially across size and location is more or less useless.

Madmallard 3y ago
Overworking doctors and understaffing to save money and any cutting corners being done is something that should be outlawed, rigorously inspected and investigated constantly. At every single hospital system I've been at in the last 10 years, which is several due to chronic health issues, there definitely needed to be at a minimum 2x as many working staff as there are. There's really not excuse other than corporate greed going on here. Profit margins should not be the bottom line in a life saving institution. It is destroying society from the inside out.

steve76 3y ago

[dead]

diogenescynic 3y ago

The staff are miserable at them. I know someone who works at one of these and they can barely keep staff employed. As a result, the quality of care suffers.

ProllyInfamous 3y ago
>"WhY dO We `haVe` to pAY tRaVELiNg NUrSeS SOOoOOO mUCh?!?" Because you refuse to employ full-time staff at reasonable salaries, thus encouraging more nurses to become "travelers" getting paid 5x+ on short-term, renegotiable contracts. When un[der]appreciated nurses find out that their hospital sucks (after having literally been bled dry of funding, talent, and ability to provide actual healthcare), it is a quick revolt into contract nursing. I LOVE NURSES. To make a nurse hate you, is not an impossible task dear Healthcare Admin.

seatac76 3y ago

I know PE can act as vultures and clean up dead companies sometimes, but aside from that what good has PE done? Doesn’t the negative greatly outweigh the positive. What mechanism exists (in the U.S) to deal with this excess?

dragonwriter 3y ago
The excess (the externalization of harms to the general public and thr concentration of benefits in the capitalist class) is exactly the point of capitalism (as in, the reason the former mercantile class fought the established aristocracy for the system of features that eventually had the name “capitalism” applied to it by its critics, not as in the backward-looking idealized rationalization invented by the system’s defenders to counter critics later.) The US (like most modern mixed economies, as much of the developed world has moved beyond pure capitalism) has a few features (progressive income taxation, some taxation of property and luxuries, schemes of redistribution supported by those) to slightly mitigate that excess, but its still a central feature of the system on which elites rely and which they aggressively defend.
- JumpCrisscross 3y ago
  > excess (the externalization of harms to the general public and thr concentration of benefits in the capitalist class) is exactly the point of capitalism That excess production is also called improving living standards.
  - dragonwriter 3y ago
    The excess being referred to is not the excess of production but the excess of negatige externalities over positive externalities, which is very much not “improving living standards”.
cjbgkagh 3y ago
They capture more consumer surplus so the better they are at their job the worse off you are as a consumer. Where the market price is close to the marginal utility it barely matters if the company survived to continue to provide the product or service. In my view what makes a product like the new Edison Motors EV Semis revolutionary is not the technology but saying no to more money and leaving consumer surplus on the table for the benefit of their customers. It’s hard to say no to more money.

anonuser123456 3y ago

[flagged]

cnewey 3y ago
What about being from a union advocacy group detracts from the findings of the study? What about the study makes you think it’s poorly run?
worik 3y ago
Really? https://pestakeholder.org/ https://pestakeholder.org/ authored the report. A "union advocacy group"? JAMA is the Journal of the American Medical Association. Methinks you are too quick to dismiss this