14 ms·

Death rates rose in hospital ERs after private equity firms took over

• 05 1y ago
  And if someone shoots another health exec.. well, I hear some gun deaths are worth it in order to have Second Amendment.
• derbOac 1y ago
  My impression is a lot of US health care problems are caused in part by a sort of unholy combination of restricted competition and access, together with profit driven market participants. So you end up with this marketplace constricted by overregulation — some well-meaning but often basically occurring because of protectionist moats and regulatory capture — increasingly controlled by profiteers trying to extract as much money as possible, with patients at the bottom, providers in the middle, and executives at the top. I think the problems with monopolies in the US are broad in scope but it hits healthcare especially hard because of how grotesquely distorted it is. I'm not surprised by this finding, although I find in economics and healthcare forums the results tend to be misused (at least in my opinion), because it gets used to argue against any deregulation or cost cutting, instead of cost cutting of the type that tends to happen for the benefit of investors and shareholders, rather than cost cutting of the type that increases healthcare options and access.
  • palmotea 1y ago
    > So you end up with this marketplace constricted by overregulation — some well-meaning but often basically occurring because of protectionist moats and regulatory capture Don't hand-wave your claim of overregulation, be specific and name the regulations you think should go away.
    • pfdietz 1y ago
      > Don't hand-wave your claim of overregulation, be specific and name the regulations you think should go away. Regulations that prevent construction of new hospitals without some sort of "demonstration of need".
      • myrmidon 1y ago
        How would higher hospital density help quell healthcare costs, though? Isn't that just more infrastructure, administration overhead and staffing that victims have to pay for, in the end?
        • wat10000 1y ago
          Where would you expect bananas to be cheaper: a town with five grocery stores, or a town with one?
          • ceejayoz 1y ago
            I mean, that depends. A town with ten people and five grocery stores will be inefficient, and probably have very expensive produce as a result.
            • wat10000 1y ago
              A town with ten people won't have five grocery stores in the first place. Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it.
              • ceejayoz 1y ago
                > Nobody's going to spend a bunch of money to open a store in a place where there isn't a customer base to support it. Tell that to the waves of cupcake shops, craft breweries, and now cannabis dispensaries in my area.
                • wat10000 1y ago
                  Right, luxury items are definitely an apt analogy here. Man, people really do love to argue, huh.
                  • 1y ago
    • viscountchocula 1y ago
      Certificate of Need: basically, prove to regulators that there is enough "need" before opening up new facilities. https://en.wikipedia.org/wiki/Certificate_of_need https://en.wikipedia.org/wiki/Certificate_of_need
      • bilbo0s 1y ago
        As someone already pointed out, PE owned hospitals are in states with, and in states without, CON requirements. Certainly on the face of that fact it would appear the existence, or nonexistence, of CON requirements has no effect on PE hospitals charging more and having far inferior outcomes. Do you have a hypothesis as to why CON requirements are driving inferior outcomes and increased cost metrics at PE owned hospitals? (A hypothesis that accounts for the fact that PE owned hospitals underperform even in the absence of CON requirements.) Serious question. I'm trying to get my head around this.
        • SkyBelow 1y ago
          Sample hypothesis with only minimal amount of knowledge on it. PEs seek to make profit, and are looking for places where they can either raise prices or lower costs (which will quickly correlate with worse outcomes) while not losing customers (yes, you could call them patients, but PE will view them as customers), or at least losing so few that the overall numbers result in more profit. One way of doing this is looking for barriers to competition/moats. CON is just one type of moat, and so is one factor PEs evaluate, but the presence or absence of other moats can still override the presence or absence of this one moat. One could try to work this out from data with some sort of regression, but with so many possible moats and a relatively limited number of data points, it would be easy to overfit the data. In comparison, non-PE hospitals might have some profit motive (or keeping to budgets, not going bankrupt, ect.), but will be less driven by this mentality and thus their relationships to moats will be more complex, and so something like a CON requirement won't be as fully exploited to raise prices or lower costs. This also fails to account for other ways that PE can seek to make money, which involves more complex parts of law and financing that I'm not well versed on (I've ready some things about real estate, but don't know enough to fairly analyze the claims).
    • betaby 1y ago
      In the USA/Canada number of doctors minted is caped by the cartel of doctors. That costs non-trivial money and lives lost. Source: https://thedailyeconomy.org/article/how-congress-created-the-doctor-shortage/ https://thedailyeconomy.org/article/how-congress-created-the... and many others
      • insane_dreamer 1y ago
        That’s not a regulatory issue
        • topkai22 1y ago
          Since the government (federal or state/local) authorizes those organizations to certify physicians and restricts medical care to only those who have been certified, it is.
        • nick__m 1y ago
          What kind of issue it is then ? If a regulation permits the doctors associations to set the allowed number of doctors residency, naively it is a regulatory issue.
          • insane_dreamer 1y ago
            It's a funding issue. There aren't enough residency slots available given the number of medical school grads. Residency is a requirement to get a medical license--which is issued by the states, not the federal gov. The reason there aren't enough residency slots is because they are heavily subsidized by the federal gov and they put a cap on the funding. No one else wants to foot the bill, so the slots remain limited, thus the licenses remains limited.
        • tptacek 1y ago
          It obviously is. A federal government policy decision caps the number of doctors we have, and another federal government policy decision restricts a huge number of basic medical services to those doctors.
    • johnisgood 1y ago
      FDA drug approval processes and insurance regulations.
      • palmotea 1y ago
        > FDA drug approval processes What, specifically? Just abolish them all, and return to the pre-1938 status quo (e.g. marketing radium water to cure what ails ya)? Or specific reforms to make the drug approval processes more effective? https://en.wikipedia.org/wiki/Radithor https://en.wikipedia.org/wiki/Radithor
        • cogman10 1y ago
          Best way to make the entire process more efficient would be centralizing R&D and approval and nationalizing the manufacturing of drugs. MAYBE you could license out the rights to produce drugs on 10 or 20 year license agreements. Turn it into a pure R&D effort and not one driven by profit.
          • ajmurmann 1y ago
            Who is gonna decide how the R&D money gets spent? What's their skin in the game and their feedback mechanism? Why will they do a better job picking what to research than current pharmaceutical companies?
            • cogman10 1y ago
              > Who is gonna decide how the R&D money gets spent? Same way the NHS previously funded medical research. Grants and grant review. You can expand that department and effort. > What's their skin in the game and their feedback mechanism? Believe it or not, some people just want to research and look into cures for diseases. Shocking I know. Feedback can be reviews of their work and blackballing bad actors that consistently kick out bad research. > Why will they do a better job picking what to research than current pharmaceutical companies? Because they already are. Pharmaceuticals aren't doing the majority of research, they are taking NHS funded research and running it through FDA approval. Ozempic, for example, didn't come from pharmaceutical research, it came from grant research into lizard spit.
    • mothballed 1y ago
      [flagged]
      • hiddencost 1y ago
        Hoodrats?
        • mothballed 1y ago
          Source: worked ~1 year in an inner city ER alongside a doctor seeing every case. Yes it was the hoodrats abusing the system.
          • habinero 1y ago
            Working all of one year before you got fired doesn't make you an expert, sorry. It's probably best you moved on from healthcare, you don't seem suited for it with your attitude.
            • mothballed 1y ago
              Unfortunately my attitude is the only one that will actually help you fix things because I'm bringing you a sober view of what the situation is. And people much "better suited for it" who worked in inner city ER generally had even less rosy thoughts than I did, if you want to defer to "experts" it's hilarious you would think this is unusual takeaway and that my opinion wasn't formed in large part by the experts thinking the very same thing (which of course they are never going to tell to the patients, you're probably not going to hear it unless you actually work in an ER and are close and comfortable enough with doctors for them to risk themselves to tell you what they really think as it's totally unacceptable to say it publicly).
              • habinero 1y ago
                Sure, buddy. "Everyone thinks this way, they just don't say it" has been the rallying cry of people with bad minority opinions forever.
    • kriops 1y ago
      [flagged]
    • potato3732842 1y ago
      That's like saying "it's ok if I shit in the river, it's a big river". When a million other people do it you've got a water quality problem. Each and every one of these regulations can in abstract, be justified by some useful idiot looking at only the first and second order inputs and outputs and not looking at the totality of the effects. Nobody with a brain would defend shitting in the river, but here you are asking for individual turds so that they may be justified on the basis that the individual dropping them was relieved and their individual impact on water quality was minor.
      • scott_w 1y ago
        No it's not. Shitting in a river is always a net negative. Regulations can be positive, negative, or ineffective. Trying to "just count" the regulations to determine quality completely discards this critical dimension and betrays an almost childlike view of the world.
        • potato3732842 1y ago
          >Shitting in a river is always a net negative It beats anything open air by miles. Sure, an outhouse would be better but river > street. >Trying to "just count" the regulations to determine quality completely discards this critical dimension and betrays an almost childlike view of the world. You're grasping at straws here. I am under no obligation to give such an infantile opinion (the one I initially replied to) a response at length. This is not the venue for such minutia.
          • scott_w 1y ago
            > I am under no obligation to give such an infantile opinion Responding with “I know you are but what am I?” is just proving my point.
    • deleted 1y ago
      [deleted]
    • pfdietz 1y ago
      Another issue is the requirement that doctors adhere to "standard of care" regardless of cost. If they don't, they are subject to malpractice lawsuits. Elsewhere, quality of a good or service is traded against cost. But in medicine, there's a cost ratchet as ever more expensive and marginally more performant treatments are introduced.
      • bilbo0s 1y ago
        This is another example of a requirement that both PE owned and non PE owned hospitals, presumably, followed.e (I would hope neither of them were ignoring standards of care in the treatment of patients.) Yet the metrics are substandard at only the PE owned hospitals. So you would need to outline how this requirement unduly burdened the PE owned hospital relative to the non PE owned hospital for it to be the cause of the discrepancy. There may be such a reason, but you haven't outlined it in your post.
    • mimikatz 1y ago
      Let nurses do more, let them write some prescriptions, let them open up a shop that puts casts on people with broken bones and minor things which they mostly do anyways.
    • landl0rd 1y ago
      - The AMA froze the number of med schools for decades even as residency availability increased. - The majority of states still maintain "certificate of need" laws for new hospitals, ambulance providers, etc. - The AMA holds a state-enforced monopoly over physicians. - Many states still limit NPs/PAs, requiring physician supervision for things for which those people were trained. - Lack of interstate reciprocity in licensing means mobility is constrained and supply can't follow demand. - Costly medical equipment usually requires first-party repairs; mfgs claim a third-party modification (repair) constitutes remanufacturing under FDA regs. - Stark law makes e.g. physician/hospital value-based care arrangements very hard. It's quite strict and everyone has to tiptoe around it a bit. There's also the huge problem of malpractice insurance costs due to insane tort settlements. Awards need to be capped yesterday because it's too easy to talk a jury into bankrupting people over things that legitimately just sometimes happen. I'm guessing others could give you an even better list. Some of those are a bigger deal than others but it's a huge issue. Insurance net margins just aren't high enough to blame it and drug costs aren't enough of our total healthcare spend to be at fault. It comes down to humans being too expensive. There remain many areas of care where we can't cut man-hours down without sacrificing safety and quality. As such, we should reduce the insane byzantine co-ordination and compliance overhead.
      • dimal 1y ago
        Don’t forget that the AMA has a monopoly on billing codes. Medicare defines the billing value of every procedure as Relative Value Units (RVUs). Then Medicare defers to AMA’s guidance on what these values should be. Insurers default to RVUs x multiplier. So the AMA has the ability to set prices. Oh, and patient value isn’t considered for these units. They are explicitly defined as input driven, so a procedure that is less costly to perform but has higher value to the patient will be billed at a lower value. Hospitals are incentivized to choose procedures that they can bill at a higher rate, and so because of these perverse incentives, they necessarily will ignore cheaper more effective treatments and choose the more expensive ones. I’m a lefty, but the older I get the less I believe in the old New Deal style leftism I’ve been sold my whole life. As systems get more complex, they simply become a way to obfuscate oligarchic control.
    • maxerickson 1y ago
      Certificates of need. To reduce costs, we supposedly perfectly plan capacity and prevent over investment. Should also probably drop requiring an ER for Medicare certification and just directly subsidize ERs.
    • derbOac 1y ago
      Others have kind of mentioned a lot of things I might anyway, and it's hard to summarize what I think is necessary. But to summarize, I think there needs to be a deregulation of licensing or practice laws to allow other types of providers to do more, of the sort they are perfectly capable of doing (and that studies show they can do) — pharmacists, psychologists, and optometrists are just some examples — and I think there needs to be more flexibility and diversity in terms of provider types and degree paths. My guess is there are many types of providers we can't even envision right now because there's such a rigid schema about what healthcare professionals should look like. I also think, for example, there are probably a lot of cases where someone could go from a PA -> MD degree without returning to do a second degree; I might be wrong about that but these are the types of things that should be encouraged at least as experiments. I also generally think there's a lot of choice that could be encouraged in terms of drug access. I generally think people should be able to buy medications and drugs without a prescription, or at least under the monitoring of a pharmacist or something, or at least in most cases. I can think of medications that there have literally been papers written saying that they are safe to give without a prescription decades ago and they still require a prescription; there's also medications that people take for years safely, and it seems kinda absurd to require them to get a prescription for them. My thoughts about the FDA itself are complex and could probably an essay in itself. I'm very in favor of public healthcare, and public healthcare institutions but I also feel a lot should be deregulated or reregulated toward greater openness, choice, and competition. There's probably a lot of areas where there should be more regulation too I suppose — I think antitrust principles should be applied to insurance and hospital consolidation more often.
  • baq 1y ago
    'Your appendix is my pension plan dividend'
  • giancarlostoro 1y ago
    I summarize it with one word after talking to a hospital billing manager. Subsidized costs. If you cant pay someone else will be receive marked up prices. On top of that and bear with me, but the way health insurance works feels like you gotta be in the right “mob family” where each provider is different in leverage in conjunction with which employer you work for. They can just take hospitals out of their “network” if they dont lower costs, so small businesses dont get this level of leverage, but employers with large numbers of employees do. You could have someone with a drastically lower bill just because of where they work, not even related to how much they make mind you. It all goes back to your healthcare costs being subsidized by those who are left with the crappy end of the stick. I think transparency in hospital billing is drastically necessary. If not for every single surgery out there at least for all the really standard things that arent so complicated. I am not a doctor. I think healthcare can be fixed without throwing more government money at it, but we need people to understand it better and work out how to bring costs down. If you are not aware yet, if you think you need to go to the ER think about what you NEED, is your arm broken? This sounds crazy but find a lab that will xray your arm. It will cost way less, and sometimes the insurance will pay the full cost of labs for you since you saved them a fortune. It sounds dumb, but it could save you so much financially. If you are in more urgent needs dont waste any time go get the care you need.
    • joe_the_user 1y ago
      I disagree with your analysis. I think you are wrong. Health Care is a natural monopoly like an electrical system. Basically, a large portion of health care the creation of infrastructure that everyone benefits from. An MRI machine or whatever is benefit to everyone since everyone might need it even if only some people actually use it, etc. For that reason, the cost of procedures, infrastructure, etc, etc. are infinitely debatable and there is no true way to way to assign costs. And sure, the actual assignments are irrational but framing this "things are subsidized" has things exactly backwards. Here's scenario - suppose electrical companies weren't responsible for maintaining their own grids and homeowners had to individually maintain insurance in the event of a pylon going down. Suppose if you didn't have insurance and could be tagged as the last user of a substation, you could in-hoc for the entire cost of repairing a pylon or whatever. This would only approach the irrationality of private medicine but I think it illustrates the situation. (and the finance system might manage to put that in place too if we're not careful).
  • dev_l1x_be 1y ago
    Yes, or government intervention that looks good on paper and disastrous in practice. Somehow people have this notion that healthcare should be treated differently than other service industries. I would argue that the least amount of government control yields to the best result. There is only the size limitations (antitrust) that had potentially good outcomes. We could simply ban m&a above a certain size and make the externalities have an impact on revenue and that would be probably enough.
    • DarkNova6 1y ago
      Somehow US citizens have this notion that healthcare is a universal problem and that US-problems are not self inflicted. Everywhere else in the civilized world, you pay less and have better service. The US has the highest degree of industry meddling, most middlemen cashing out and the least governmental regulation. You are objectively being lied to.
  • thisislife2 1y ago
    "Regulatory capture" is a nice euphemism for the problems that a corrupt political environment creates. It is corruption that really hampers the creation of a fair and competitive capitalistic market. Regulation can indeed be balanced to create a fair and competitive capitalistic environment. A great example of this was the telecom industry in India during Dr. Manmohan Singh's government. Both the economic and telecom policies created a very booming and competitive telecom industry in India, with many foreign and local businesses trying their best, to be the best. It also ensured that the technology was accessible and affordable to all, providing a further fillip to the indian economy that increased connectivity delivers in a society. Contrast that 2+ decades later with the current telecom industry scenario in India where only 3 major private players (and 1 government owned company) survives today due to flawed and corrupt policies of the Narendra Modi government. (As the government owned telecom enterprise now doesn't really "compete" with the private players, the 3 private players have already formed a cartel to dictate pricing, and keep gouging the public, with increased pricing, with the connivance of a government that believes in oligarchy vis the South Korea Chaebol model). And let's not ignore that regulation is necessary in a democracy because capitalists are only (rightly) focused on creating capital. But obviously they are not the only contributing members of a society (nor, do I dare say, the most important ones) and the rights and needs of others in a society are just as important in a democracy. That is why everyone today also realises that things like monopoly, hoarding or black marketing, for example, aren't good for the overall well-being of a society, even if that's how capitalists can derive "maximum" value (i.e. make the most profit). History says that imperialism is the capitalist model that delivered peak "efficiency" in terms of deriving the maximum "value" for the (low) capital invested in it. But obviously, imperialism, even in its limited form today, is not compatible with democracy or concepts of sovereignty.
    • burnt-resistor 1y ago
      The problem in the US is there are too many rich people devoid of morals and less rich people who support them and are brainwashed into ideological opposition of most or all regulation and government without nuance. Furthermore, Americans in aggregate condone being ruled by extreme inhumanity, corruption, stupidity, and greed by lack of effective objection. It's like an old-school third-world country and Americans either don't realize how bad they have it or lack the courage to do anything about it.
  • someguynamedq 1y ago
    Why are we talking about deregulation when the topic is the ill effects of unregulated rentier profit seeking behavior of PE firms? We need to make debt loading and dividend recapitalization of hospitals illegal. Let them hollow out Neiman Marcus and Dunkin doughnuts, I don't really care. But financial engineering should have no place in our healthcare system.
    • tptacek 1y ago
      Because the PE firms are exploiting a broken regulatory system, obviously.
  • ben7799 1y ago
    This actually sounds a lot like the US problems with energy (electrical, gas) infrastructure and also things like telephone and internet providers. They've almost always got a state approved monopoly or duopoly and then magically the state always allows them to raise their rates.
  • joe_the_user 1y ago
    My impression is a lot of US health care problems are caused in part by a sort of unholy combination of restricted competition and access, together with profit driven market participants. That is not wrong, literally stated. But know a lot of hn people imagine that this means making things completely unregulated might be one reasonable alternative. The obvious problem in this case is scams and unsafely/deadly treatments. Here, one can point countries with functioning, lightly regulated systems. The problem is that these countries depend on cultural and institutional factors keeping people honest, keeping fake medicine at bay, and etc. But the US has a cultural of religious irrationality coupled with huge, profitable and predatory organizations (the ones soaking health care dollars as well as alternative medicine cults and scammers). Before the last hundred years of regulation, 1910 or so, unregulated US medicine was a deadly, heroin soaked shit show and if you back to that, all the "alternative" scammers along with Stackler types are ready to jump in to try to equal that situation.
• southernplaces7 1y ago
  But i'm sure shareholder value saw some much healthier returns, so it all sort of balances out nicely.
  • soco 1y ago
    I wonder what if the shareholder happens to be in ER?
    • bilekas 1y ago
      They will get a tax write off for their medical bills via their companies expenses ?
      • esseph 1y ago
        Tax line item comment: "Work trip!"
    • jasonsb 1y ago
      That's a price they're willing to pay.
• MangoToupe 1y ago
  There are a significant number of people in this country that will view this as the market enforcing rational healthcare (at least until it affects a loved one). I’m not sure we have the will to improve our care.
  • baggachipz 1y ago
    > at least until it affects a loved one This lack of empathy extends to many other areas: Drug addiction, homelessness, rights for marginalized groups, etc. So long as there is a profit motive, these things will suffer due to the selfishness of those who don't (yet) receive a benefit.
    • paddleon 1y ago
      Concur. Lack of empathy is the curse of our age and the destruction of our society.
  • justinzollars 1y ago
    Thats not how private equity works.
    • MangoToupe 1y ago
      You're going to have to articulate yourself with particulars if you want me to understand what you're talking about. For instance, I didn't mention private equity at all, so I'm confused why you might think I was attempting to refer to them.
  • toast0 1y ago
    Emergency room care is definitely not a rational market. Hospitals have a federal obligation to provide stabilizing care regardless of ability to pay. That's not really a market. I wonder how this study controlled for hospital selection though. In locations with multiple hospitals available, ambulances route patients on multiple factors... Perhaps there are factors leading to these hospitals receiving patients less likely to survive. Additionally, PE often purchases distressed companies, so the likely alternative to a PE purchase of a hospital is a closed hospital. In some cases, closing the hospital would be better, but probably not all of them.
• jameslk 1y ago
  Is there somewhere I can determine if a particular business is majority held by a PE firm?
  • mv4 1y ago
    Search press releases, you fill find announcements of PE deals.
  • fma 1y ago
    I would really hope for this to be a thing. I have high suspicion of which ones are due to degradation of quality...but if I'm going to switch to another provide I'd like to know before hand if they are PE or not.
  • anon191928 1y ago
    any way to get data for it? publicly is it possible?
• bilekas 1y ago
  > Health care has been a focus of the financiers because it accounts for 18% of gross domestic product in the United States. This seems extremely high.. Ireland with free public healthcare for example is ~6%.. I think the largest in Europe, by a lot, is Germany? ~13%.
  • xtracto 1y ago
    The problem is that it's an inelastic market. So sellers can basically charge WHATEVER they want, constrained only to the line where people will revolt. But that's a very high line in the US. Health providing shouldn't be a for-profit endeavor. Certainly shouldn't be in the stock market and it absolutely shouldn't be comingled with "insurance"
    • ajmurmann 1y ago
      > The problem is that it's an inelastic market. So sellers can basically charge WHATEVER they want, constrained only to the line where people will revolt. What keeps me from bringing my business too the competition like I do in every other market? The main constraint I see right now is that there are very few, but large hospitals and my insurance only pays for me to go to even fewer of those. However, competition already works (if the patient makes an effort) for some planned procedures like CT scans where you can safe up to 80% in my own experience.
      • parpfish 1y ago
        It’s hard to compete on price when your customers don’t know any of the prices up front.
        • ajmurmann 1y ago
          Definitely true. However, it's not intrinsic to healthcare. We made it that way. You can go to https://surgerycenterok.com/ https://surgerycenterok.com/ and see all-inclusive prices for surgeries right now. Some people fly there for procedures. They have higher success rates than competitors, surgeons take more money home and the procedures cost less. It's possible.
• resters 1y ago
  i'd be curious about other metrics in addition to death rate... - health adjusted quality of life metrics and the way they are impacted by various diagnoses - healthspan metrics - patient satisfaction - employee satisfaction Ultimately, capitalism is not necessarily at odds with providing efficient high qualty healthcare. But we have to decide what matters. If death rate were the only relevant metric, medicine would be practiced much differently.
  • RoyTyrell 1y ago
    I agree, I don't think capitalism is inherently at odds with quality healthcare, and technically private equity isn't either but it certainly raises the chances. PE firms tend to be fairly parasitic with their investments - maybe that's fine for a restaurant chain but that sucks when you're dealing with lives (people or animals). I used to be in health insurance and you knew when there were nursing homes and clinics/faciltiies that were owned by PE. PE-owned nursing homes tend to have far more infractions against them, more elder abuse claims, and lower quality of life for the residents. You could say well PE buys up facilities that have room for improvement, which sometimes that's true, but in many times they seem to buy because (imo) they feel they can get by with lower regulatory enforcement so can cut costs and squeeze them. Sometimes they do buy or build higher-end senior living facilities but those are cash cows in their own way that you don't want to cut corners with.
    • lkey 1y ago
      Your thesis in defense for-profit healthcare is that PE and capitalism are not the same thing, and are not 'at odds' with quality care? You are asserting that these excess deaths and real harms due to these takeovers are not natural and expected consequences? What is the secret third thing that makes these otherwise compatible systems 'at odds' with human life?
      • MangoToupe 1y ago
        This take is also a little funny because people do often conflate "capitalism" and e.g. "markets", which certainly don't rely on capitalism. But "private equity" is about as tightly-bound to the concept of capitalism as you can imagine.
• limagnolia 1y ago
  Anyone with access to the study know how they matched patient populations at the comparison hospitals?
• parpfish 1y ago
  is the change in death rate because the health services got worse or because the type of patients going to that hospital have shifted? if they slash staffing and make it hard to schedule in a reasonable amount of time, patients with low-risk issues will just skip going altogether. Or, if they have the means, go to a nicer hospital.
• mv4 1y ago
  Serious question: is there a single example where the customer experience has improved after private equity took over?
  • deleted 1y ago
    [deleted]
  • Vosporos 1y ago
    Yes, when the customer also happens to be the equity manager, so the customer coincidentally gets a big stack of cash. ;-)
  • Aunche 1y ago
    Usually when a company sells to private equity, it is because the business is suffering from financial hardship or the current owner is unable to continue to run the business and cannot find a successor, so selling to private equity would be the least bad option.
    • thfuran 1y ago
      I'm not sure that simply stopping business is categorically worse than selling to a malevolent entity instead.
      • crazygringo 1y ago
        Closing down the only nearby hospital is generally considered worse. This is about providing life-saving care, not Toys R Us.
        • thfuran 1y ago
          As a first order approximation, closing down a nearby hospital and sending patients to one further away is only worse than PE if PE doesn't worsen care to such an extent that more people die there than would've en route to the other one. And most companies aren't about lifegiving care anyways.
• testfrequency 1y ago
  Same shit has been happening the pet care industry. The rich don’t care about anyone but their financial advisor.
• bzmrgonz 1y ago
  History will be hard pressed to find a success story after private equity takes anything over. Here I was thinking I had coined a term for them, only to find out it already exists... "HYENA CAPITALISM".
  • ajmurmann 1y ago
    Hyenas typically eat carcasses. Similarly it seems PE usually buys already distressed businesses. Is the problem the PE or are they making the best from what's left of a dead business? I genuinely don't know. Anecdotally, here in Portland metro everyone is upset about a PE firm that's ruining several beloved local restaurant chains. They bought them up during the pandemic and now many of them are closing. The local Reddit is hating on the PE firm. I suspect these restaurants would have closed during the pandemic if it hadn't been for the acquisition. They then failed anyways because certain parts of our metro area didn't recover well. I don't have access to their books. So I'm just speculating but this seems highly likely to me.
• nabla9 1y ago
  HOSPITALS: “High-markup” hospitals are overwhelmingly for-profit, located in large metropolitan areas and have the worst patient outcomes https://www.uclahealth.org/news/release/high-markup-hospitals-are-overwhelmingly-profit-located https://www.uclahealth.org/news/release/high-markup-hospital... >These “high-markup hospitals” (HMH), which comprised about 10% of the total the researchers examined, charged up to 17 times the true cost of care. By contrast, markups at other hospitals were an average of three times the cost of care. >They also have significantly worse patient outcomes compared with lower-cost hospitals, new UCLA research finds. NURSING HOMES: Owner Incentives and Performance in Healthcare: Private Equity in Nursing Homes ( https://www.nber.org/papers/w28474 https://www.nber.org/papers/w28474 >After instrumenting for the patient-nursing home match, we recover a local average treatment effect on mortality of 11%. Declines in measures of patient well-being, nurse staffing, and compliance with care standards help to explain the mortality effect.
  • gjgtcbkj 1y ago
    I wonder if we will be allowed to share this information in the future in someone knew a love one died in for profit hospital that might provoke violence against feel market believers.
    • overfeed 1y ago
      Isn't trading higher profit for +11% more deaths also violence?
      • immibis 1y ago
        No, only direct fist-on-face contact is violence. Indirect violence doesn't exist.
      • tptacek 1y ago
        To the extent it is, people are universally guilty of it, unless you can find a clear bright line for which selfish(/rational) decisions are violent and which aren't. Is it some number of hops from the person who dies that makes the difference?
• applesaucer 1y ago
  fucking duh
• lordleft 1y ago
  The market really is the greatest mechanism for laundering morally reprehensible processes, isn't it? I find that many people struggle to find the vocabulary or concepts to denounce this kind of outcome because it occurs through market forces.
  • nenenejej 1y ago
    Late stage capitalism?
    • 0xbadcafebee 1y ago
      That term is more a reference to globalism, consumerism, multinationals, wealth inequality, etc. It's been overused by the public to mean "anything I don't like that has some tentative link to capitalism"
      • lurkingllama 1y ago
        Surely a component of late stage capitalism is the accumulation of wealth leading to anti-competitive practices, in this case resulting in degradation of quality of service. Health care in the US isn’t a competitive business therefore it’s rife for anti-consumer, profit-maximizing change.
        • 0xbadcafebee 1y ago
          But you can have all those things without late-stage capitalism - and private equity predates late-stage capitalism. So saying "it's because of late-stage capitalism" is like saying "it's because of democracy". The private equity is happening within a democracy and late-stage capitalist system, but these are correlations, not causations.
          • lurkingllama 1y ago
            Ah I see your point
  • 1y ago
• wnevets 1y ago
  It should be against the law for private equity to own hospitals.
• mensetmanusman 1y ago
  Seems like a perverse incentive.
• thiago_fm 1y ago
  Isn't it obvious that a private equity firm will focus on profit and let people die? Public healthcare is the only way to go. This has been proven multiple times in so many countries.
• michaelteter 1y ago
  Ownership by profit focused organizations result in worse service? Who would have imagined!
  • jsbisviewtiful 1y ago
    How in the world are private equity groups allowed to own hospitals? One of the largest hospital orgs in the US is a non-profit and so were most in my old state (non-profits on paper at least) so it's surprising to know hospitals can be for profit
• rootusrootus 1y ago
  Maybe the next Democratic president will use the newly confirmed limitless executive power to reshape our healthcare system. Remove limits on creating new hospitals, eliminate the AMA, add in a public option for insurance, drop the age limit for Medicare to 0, etc. There are plenty of opportunities to use the power for something good.
  • richwater 1y ago
    > Maybe the next Democratic president As opposed to the 12 years of democratic presidents in the past 2 decades?
    • kjkjadksj 1y ago
      The supreme court has created functionally a despot recently. Imagine if Obama had this power. We’d all have universal healthcare already.
      • munificent 1y ago
        If Obama was in office the conservative Supreme Court would backtrack instantly and claw their power back.
        • ModernMech 1y ago
          Supreme Court gave POTUS the power to use seal team 6 to assassinate his political rivals. SCOTUS doesn't have the power to claw back their power.
  • paxys 1y ago
    Why are you assuming the next democratic president (or really any president not called Trump) will have this power?
    • ModernMech 1y ago
      Because the myth is gone. Presidents have always been restrained by their own willingness not to abuse their power. This willingness was based on two beliefs that Trump has proven mistaken over the last 10 years: 1) Congress will come together to impeach and remove a rogue president, even if he is from their party. This is not true anymore, the impeachment clause is inoperable due to party polarization. 2) The President is liable for any crimes committed in office after he leaves. Merrick Garland proved this wrong after he failed to prosecute Trump for the crime of fomenting insurrection, and then SCOTUS gave Trump and all future presidents an almost impossible shield for future prosecutors to overcome in the form of "presidential immunity". So unless something changes, the next and all future presidents will have carte blanche to wield the DOJ and FBI to attack his personal political rivals. He can impound and reallocate any Congressionally allocated funds toward implementing his ideological goals, and he can defund any programs he doesn't personally like. He can withhold funding and clearances for companies, lawfirms, and universities unless they implement his agenda. He can send the US army into US states to enforce his agenda. He can withhold disaster relief from areas he deems not politically loyal enough. He can take huge equity stakes of companies he deems nationally critical. These are all powers POTUS has now, and they will remain powers POTUS until he's prevented from using them.
• phren0logy 1y ago
  Disclosure: I'm a physician. One popular approach to saving money is to replace physicians with nurse practitioners and physician assistants, who have less education and training. The article does not discuss this element, and I'd be interested to see if that is a factor in patient outcomes. There's less data on this than you might expect. ETA: From my post lower down, adding for visibility: [The training gap is] quite a lot more than a year - in primary care, it's more like four additional years of training for physicians, and 15000 supervised clinical hours for physicians (vs 500 to 1500 hours for NPs). The gap can be wider in other physician specialties, because many have longer residencies than the primary care programs. For example, child psychiatry training is four to five years (depending on the route you take), making it longer than the three years of family practice residency. Here's a chart looking at training for MDs vs NPs in primary care. It is from a physician organization. https://www.tafp.org/media/advocacy/scope-education.pdf https://www.tafp.org/media/advocacy/scope-education.pdf
  • kjkjadksj 1y ago
    I mean we are talking what another year in school? Surely those outcome differences are gone once the nurse or pa is in the field for a couple of years.
    • phren0logy 1y ago
      It's quite a lot more than a year - in primary care, it's more like four additional years of training for physicians, and 15000 supervised clinical hours for physicians (vs 500 to 1500 hours for NPs). The gap can be wider in other physician specialties, because many have longer residencies than the primary care programs. For example, child psychiatry training is four to five years (depending on the route you take), making it longer than the three years of family practice residency. Here's a chart looking at training for MDs vs NPs in primary care. It is from a physician organization. https://www.tafp.org/media/advocacy/scope-education.pdf https://www.tafp.org/media/advocacy/scope-education.pdf
      • kjkjadksj 1y ago
• citizenpaul 1y ago
  This certainly reflects my experience with private equity in general. It seems private equity by definition does not care if you die in any form direct or indirect. IMO its one of the greatest evils going on that literally nothing is being done about. Last year I went to an interview where they flat out admitted to me that the private equity that bought them fired the entire previous team because they "believed" it could be done with far less people (4 vs 25). I asked them who has been maintaining things since that happened and they told me they have been hiring contractors to get through the period but "they haven't really been doing the job". I guess at least they were honest with me so I could nope out of there ASAP.
• bparsons 1y ago
  Sure, deaths increased by 13%, but think of all the shareholder value that was created.
• alexfromapex 1y ago
  People assume staff shortages, but I've been to a cheap non-profit hospital and everyone was very green and TERRIBLE at their jobs due to lack of training.
• otikik 1y ago
  Is anyone surprised?
• testemailfordg2 1y ago
  Privatize the profits and socialize the losses, is this too difficult to understand of being the core motto of a private equity firm. A PE firm will not have patients at the top of their priority, unless legislation enforces and regulates that.
  • anon7000 1y ago
    This is essentially just how capitalism works. Money is the only priority. So in ANY market where the financial incentive opposes human well-being, humans will suffer. That’s true in healthcare, where we’re often getting a worse product which is more expensive. While in other industries like consumer electronics, the incentives are aligned and humans are getting better products for cheaper. The PE firm is a great representation of why monopolies eradicate the positive incentives in capitalism. And this only happens after a long time and companies have had a chance to centralize vast amounts of money and power. Since there is no point that’s “good enough,” these massive companies are forced to continue growing by cutting costs (worse services, lower salary, fewer employees, closing locations) or doing absurd tricks like stock buy-backs to make their shareholders and executives very wealthy. It’s literally impossible to avoid this situation without strong consumer protection and anti-trust regulation because the incentives for massive companies are so deeply unaligned with human well-being and society’s best interests. We can either take strong action against massive companies or accept that this trend will inevitably get worse. It’s called late stage capitalism for a good reason
• bryanrasmussen 1y ago
  wow, is there anything private equity can't increase!?!
  • ivape 1y ago
    Yeah, charity.
• buellerbueller 1y ago
  Capitalism's gonna capitalism.
• toss1 1y ago
  >>"We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness" The institutions supporting three things, Health Care (Life), Prisons and Justice (Liberty), and Education (Pursuit of Happiness), should never be run for a profit if a society wants to be equitable and prosperous. Capitalism and profit motive are great for some things in a society, but are also counterproductive at many others. Use the right tool or system for the right job.
• mercurialsolo 1y ago
  Why does this sound like a Boeing 2.0? Hand over to the sharks and you see incidents go up
• burnt-resistor 1y ago
  After PE took over regional and rural hospitals, they removed specialties so patients have to be transported to larger hospitals. And guess what else they bought up? Air ambulance services. Flights are up 900% and profits are up too. This undoubtedly increased unnecessary and preventable death and suffering in the name of profiteering. Some things should never be allowed to be under-regulated for-profit cash grabs.
• mettamage 1y ago
  Perhaps a hot take (to some at least): the invisible hand works. Supply demand, it works [1]. Unfortunately, that also means that your life can be priced out of the market. If one finds that important, then it doesn't work. Profit motives don't care about humans, it cares about profit. If it has to care about humans because of it, then so be it. We've never been individualists. We need infrastructure, thus some form of collective action. Without roads, no freedom to comfortably drive a car, without the internet no freedom to comfortably search for information, without healthcare no freedom to comfortably stay healthy when a medical emergency occurs. Could you imagine if all roads were a for profit road? Could you imagine if TCP/IP was for profit? Well, I think some of you could, as some of you know failed attempts of protocols for money at that deep of a level. I'm curious about the stories. In any case, that's what's happening here with medical institutions that should have an infrastructure role. [1] Well, to be fair, there are many caveats, but let's not go into oligopolies, cartel-like formations, etc.
• fhkatari 1y ago
  Here is a thought experiment, especially for people with pensions (unlikely on the HN comments board). PE's are being funded by pension funds. So, as a pensioner, maybe you get a slightly better return. However, the services you will need as a pensioner (hospital and nursing home care) are significantly degraded by private equity. Would it not be better if pension funds pulled out of PE entirely?
  • someguynamedq 1y ago
    The argument here needs to be a societal one because everyone will assume that they'll be going to the hospital that isn't affected by it
• ChrisMarshallNY 1y ago
  PE seems to have a Sadim touch. Everything they touch, turns to shit. However, they squeeze a lot of money from the coprolites, and that’s enough to buy regulatory capture, I guess.
• nataliste 1y ago
  >Beneficiaries in EDs of private equity hospitals experienced 7.0 additional deaths per 10 000 visits after acquisition relative to control (13.4% increase from a raw baseline of 52.4 deaths per 10 000; P = 0.009). In other words, an increase of 0.00055 deaths per visit. >Limitation: >Potential unmeasured confounding; lack of generalizability to other acquisitions or patient populations.
• karmelapple 1y ago
  This could be the biggest bipartisan rallying cry around which politicians and elected officials could cheer on improvements. But I suspect that won't happen.
  • someguynamedq 1y ago
    There are no big players in our current political system with the will to impose new regulations on finance.
• Chinjut 1y ago
  Looking at death rates in isolation paints a misleading picture, like accounting only for costs and ignoring revenue. Net profit is the measure of overall value to the economy, and whatever maximizes profit is by definition the greatest good for the greatest (i.e., best, if not most numerous) people.
  • someguynamedq 1y ago
    I hear net profits were pretty good under slavery
• klik99 1y ago
  I've instinctively been avoiding hospitals run by PE, and now I have a good reason to. I'll never forget with my first kid they tried to scare us into genetic testing - I mean, they had a pamphlet and video they were required to show us that were meant to scare us into it, but I could tell from the doctors face that she wasn't into it and felt like she was apologizing when she said she had to play this video and leave the room. We switched to a different hospital almost immediately.
• jimbo808 1y ago
  I desperately wish to stop the flow of bad news into my brain. I've deleted every social app, but it always finds me...
  • Dumblydorr 1y ago
    Block all news sites? I Just did that, it does help! I like HN because it’s pure text and the community is good. At least here people disagree and try to use some evidence or logic and engage with each other. I was thinking I could buy an hour or so of time in my day cutting this all out, surely then I’d be shredding music practice way more… so hard to get down to it after work and kids.
• CommenterPerson 1y ago
  Unchecked capitalism may create a couple of wonder drugs costing millions, for a few people, and enrich the 0.1%. On the average it will kill more people, make more people bankrupt and kill the economy.
• tedggh 1y ago
  Nothing shocking here. The private equity recipe is pretty simple: 1) Buy a profitable business 2) Increase the margins overnight by removing costs or increasing prices 3) Suck the blood out of the business until it collapses. 3) Sell the carcass and write it off. 4) Rinse and repeat.
• fair_enough 1y ago
  I liked Tulsi Gabbard's "two-tier" proposal for healthcare reform back in 2020. Grant state or federal government full control over emergency care and only the most expensive and obscure cancer treatments all of which act economically as a natural monopoly. Then for every other segment of healthcare where competition can exist, keep them as private markets but greatly enhance antitrust enforcement. The only thing missing in all the good talk about healthcare is what to do about health insurance, which is the middleman that drives up prices. I propose making all forms of price discrimination illegal in healthcare, i.e. uninsured and HSA patients cannot be charged more than health insurance companies. I also propose standardizing healthcare into 5 different health plan contracts, then requiring all health insurance companies to make all of their health plans fit into one of those contracts with zero modification to the terms and conditions. This will make litigation faster and easier, and it will avoid fraud disguised as "fine print". Then, finally I propose requiring all health insurance companies to pay for the services up front and then sue the patient to get the money back, reversing the existing pattern where the burden of proof falls on the patient and the patient has to wait until the insurance provider relents. Think of it like a patient suing an insurance company and getting an injunction to pay out the claim while the legal ruling is pending, but faster.
  • Uvix 1y ago
    > I propose making all forms of price discrimination illegal in healthcare, i.e. uninsured and HSA patients cannot be charged more than health insurance companies. As long as it's left generic so it goes both ways. Currently it's usually the uninsured patients who are charged less (since they're paying the whole thing out of pocket instead of having insurance cover most or all of it), not the insured patients.
    • fair_enough 1y ago
      I'm not comparing the bill uninsured patients pay to the bill insured patients pay. I'm comparing the bill hospitals charge uninsured patients to the bill hospitals charge insurance companies for insured patients. Hospitals and clinics offer a preferential rate to insurance companies as a sort of volume discount because insurance companies with thousands of patients have a lot more negotiating power than any individual patient who is uninsured or using an HSA. It got even worse once health insurance companies started negotiating contracts with favored nations clauses requiring hospitals to bill then ~10-30% less than patients paying out of pocket. It's an oligopoly, but on the demand side: an oligopsony.
• linuxhansl 1y ago
  Did anybody really expect any other possible outcome? Humans have an astonishing ability to put their self-interest before others. Even if it money vs a life. That said... How much is a day, a month, or a year of a human life worth? Since it's clearly not infinite, there must be some line where saving a life is too expensive. What is that line? Of course I have no answer here, but I think this ethical dilemma is what it boils down to. Still terrible. :(
• Sohcahtoa82 1y ago
  Here's a list of all the surprised people in JSON format: []
• AfterHIA 1y ago
  This kind of thing makes Galen and Hippocrates sad as they watch down from physician heaven. https://en.wikipedia.org/wiki/Galen https://en.wikipedia.org/wiki/Galen
• anordin95 1y ago
  I would have liked more insight into the control group (so called "matched control") hospitals. Typically, PE firms only step in when companies (in this case, hospitals) are struggling. If the PE hospitals were in dire financial straits pre-acquisition, these results don't seem too surprising. Ideally, the control would be a set of hospitals that PE firms otherwise wanted to acquire but were blocked for reasons unrelated to financials & performance of that hospital, e.g. regulatory. Granted, I expect that might be quite rare. To be clear, I think private equity firms have had quantifiable negative impacts in many other aspects of healthcare. For example, acquiring helicopter-rescue/air-ambulance companies and sending them out for non-emergency situations.
• mdnahas 1y ago
  If you want to know why the problem is hard to fix: healthcare companies spend $660,000,000 each year in lobbying. That’s more than $1,000,000 per member of Congress. http://michaeldnahas.com/blog/numbers_that_matter/2019-9-15_healthcare_lobbying.html http://michaeldnahas.com/blog/numbers_that_matter/2019-9-15_...
  • mdnahas 1y ago
    Here is the direct link to OpenSecret’s report on the Health sector. My blog post is out of date. Total lobbying is now $750,000,000. And that doesn’t count $420,000,000 in campaign spending. https://www.opensecrets.org/industries/indus?cycle=2024&ind=H https://www.opensecrets.org/industries/indus?cycle=2024&ind=...