Private equity. Hospitals.

December 29, 2023 1:13 PM

Paper: "Private equity acquisition of hospitals, on average, was associated with increased hospital-acquired adverse events despite a likely lower-risk pool of admitted Medicare beneficiaries, suggesting poorer quality of inpatient care." Press release. CNN article. Rebecca Watson video with transcript. Private equity response.
posted by clawsoon (42 comments total)

So in the interest of public health we’re going to make private equity acquisition of hospitals illegal and nationalize ones already owned by private equity, right? Right??
posted by jedicus at 1:20 PM on December 29, 2023 [45 favorites]

I kept waiting for some breakout more detailed than "private equity", which covers a lot of ground. I mean, was one owner responsible for 50% of the new problems while another owner oversaw greatly improved services? Just giving an average seems like a dodge to me.

Not that it would surprise me if private equity owned hospitals were suffering, but I'd like to see a break down listing the 51 hospitals, owners, and the raised or lowered quality.
posted by Tell Me No Lies at 1:32 PM on December 29, 2023 [3 favorites]

So Private Equity is MRSA. Makes sense.
posted by eustatic at 1:32 PM on December 29, 2023 [10 favorites]

I'm not at all surprised by this, but I *am* surprised the difference is so high - 25% increase is a stunning amount of difference.
posted by joannemerriam at 1:34 PM on December 29, 2023 [5 favorites]

There's no reason for private investors to acquire a hospital unless they believe they can profit from the acquisition. Turning up the profitability dial, at a hospital, means spending less money on more treatments for more patients. Spending less money on more treatments for more patients leads to adverse outcomes.

I have a friend who's seen this play out at their own facility. Cuts in staffing, cuts in quality and availability of supplies, surgeons leaving for better pay or technology elsewhere, management looking for every possible way to cut corners and save money. Staff trying their best to hold the line and keep infections and other adverse outcomes down, but you can only do so much.

Anyone who knows how capitalism works could have anticipated this outcome. In fact it's all but certain that the investors themselves anticipated this outcome. Presumably the people making the decisions get their healthcare somewhere else.
posted by Two unicycles and some duct tape at 1:40 PM on December 29, 2023 [28 favorites]

Remember how Toys R Us died? This is how Toys R Us died.
posted by hippybear at 1:50 PM on December 29, 2023 [5 favorites]

The "Private equity response" link is giving me an error which seems appropriate because what can you even say? And, without trying to be defeatist, what can you do? I can't just not use hospitals if I need one. I don't know that anyone is running on a platform that really opposes this so I don't know how voting is the answer. They don't think they need to give us a response beyond "so what, what are you going to do about it?" and I don't have a great response for that, at least not one appropriate for this website.
posted by an octopus IRL at 1:52 PM on December 29, 2023 [3 favorites]

Okay in case anyone else is interested I did find the page I to which I think that link was intended to direct (https://www.privateinvestmentworks.com/2023/12/26/private-equity-driving-high-quality-care-across-americas-hospitals/) and it makes me sad and angry. They also talk about private equity in comparison to "other for-profit counterparts" and the fact that there are multiple types of for-profit entities trying to make a profit off people needing healthcare makes me really, really depressed.

Edit: weirdly it's still giving an error but if you Google the link you might be able to find it
posted by an octopus IRL at 2:00 PM on December 29, 2023 [4 favorites]

still reading through this stuff, but: is there a relatively accessible way to determine what hospitals in a given area are owned by private equity? this could be useful on an individual level, for determining which hospitals to avoid, on a community level, by posting/talking about those hospitals, and on a research level, as a tool to help answer the questions that tell me no lies posed above.
posted by bombastic lowercase pronouncements at 2:03 PM on December 29, 2023 [4 favorites]

"Private equity response"

I thought that was an odd thing to have in the first place as there are many many different private equity firms out there. Did they collectively put out a position paper?
posted by Tell Me No Lies at 2:04 PM on December 29, 2023

It's great that you've shared this but Quebecor, Post media and others have convinced a huge block of Ontario, Canada that the public system can't be improved by way increased funding or more stringent oversight. People must think that private hospitals are going to spring up from the cornfields.
posted by brachiopod at 2:07 PM on December 29, 2023 [2 favorites]

(partially) answering my own question: a footnote in the paper refers to another paper which determined which hospitals have been purchased by private equity via the following method:

We created a novel data set of acute care hospitals in the US that were acquired by private equity firms. Private equity firms often do not directly purchase a hospital. Instead, the purchaser is frequently a subsidiary company that the private equity firm owns. In addition, the hospital is often part of a large health system or delivery organization being acquired by private equity. Given the intricacies of the acquisition structure, data on hospitals acquired by private equity firms are difficult to assemble. To overcome these challenges, we used S&P Global Market Intelligence software to obtain a list of all transactions whereby a private equity firm gained control of a hospital by directly purchasing it, having a portfolio company purchase the hospital, or by owning a majority of the stock in a health system. We supplemented these data with information from quarterly Merger and Acquisition reports by Irving Levin Associates. We then used documents from the US Securities and Exchange Commission, official press releases, and hospital websites to verify that the hospital was acquired. To verify that the firm (or parent company) acquiring the hospital was considered private equity, we consulted the PitchBook database, which provides information on company profiles.18 Drawing from the above resources, we assembled an original data set of 217 US acute care hospitals between 2005 and 2017 that transitioned from not being owned by private equity to being owned by private equity (eTable 1 in the Supplement), of which 135 hospitals (62.2%) were part of the 2006 acquisition of HCA. The Institutional Review Board of Harvard Medical School approved this work. In this analysis, all data were in the public domain, and no data were at the human subject level.

i haven't found a table in that paper that individually names the hospitals that had been purchased by private equity, but i'll keep looking.
posted by bombastic lowercase pronouncements at 2:09 PM on December 29, 2023 [9 favorites]

Edit: weirdly it's still giving an error but if you Google the link you might be able to find it

I was having the same problem (and also figured it was appropriate) but removing the forward slash at the end fixed it for me.
posted by TedW at 2:10 PM on December 29, 2023 [2 favorites]

the private equity response is so fascinating. i wish i had more time to really dig into their links, but on the surface it appears to be a large amount of very, very aggressive cherry-picking wrapped up in very emotional rhetoric.

but hey what do i know maybe they're not lying maybe they've got decent data anything could happen right this is me attempting to pass on the small research project which i'm in danger of hyperfocusing on before the hyperfocus sets in and eats up my remaining hours in 2023
posted by bombastic lowercase pronouncements at 2:19 PM on December 29, 2023 [2 favorites]

Pope also Catholic.
posted by parmanparman at 2:27 PM on December 29, 2023 [6 favorites]

I think the average mefite is neither surprised or shocked by this news, but… a lot of people are still rolling with the 1980s/90s mindset that public goods, publicly owned operations, are intrinsically less efficient and less worthwhile than the private market. Which is weird to me, because (gestures at the outside world). How can we reach those people who believe in the invisible hand of the market, and convince them of the negatives of late capitalism? Like, what’s the trick?
posted by The River Ivel at 2:36 PM on December 29, 2023 [7 favorites]

Public services are supposed to be less efficient, because they have to cover every single corner case (14th Amendment). That takes resources and time, something the antitax capitalists elide because their goal is slavery and robots for everything that people who are not them depend on.
posted by rhizome at 2:42 PM on December 29, 2023 [6 favorites]

So Private Equity is MRSA. Makes sense.

Absolutely seriously, and having given it some thought, I'd suggest that Private Equity is cancer.
posted by Grangousier at 2:45 PM on December 29, 2023 [7 favorites]

TedW: I was having the same problem (and also figured it was appropriate) but removing the forward slash at the end fixed it for me.

Thanks for the fix. I've flagged the post with a request to the mods to fix the original link.

For a minute there I had hoped that we'd gone back to Metafilter circa 2001 and overwhelmed their server.
posted by clawsoon at 2:45 PM on December 29, 2023 [1 favorite]

Grangousier: Absolutely seriously, and having given it some thought, I'd suggest that Private Equity is cancer.

Hmm, I dunno. Cancer develops from a mutation within the system, which would be doctors coming up with the wonders of finance capital and using it to take over their own system. Maybe it'd be more like that fungus which takes over the brains of ants?
posted by clawsoon at 2:48 PM on December 29, 2023 [3 favorites]

At a large enough scale, capitalism will always embrace murder for profit. It just happens to be easier to spot in some situations then in others. My rough estimate is that any company large enough to be listed on the NYSE falls in this category. If they are not directly killing someone, they have effectively subbed it out to another corporate entity.
So banks don't directly kill their victims, but they do business with companies that are profitable because of their murderous behavior. This obviously extends to destroying the lives of people short of killing them directly. Homelessness is an example, along with the working poor that rely on government assistance to get by. And some business sectors, like Big Pharma, the gun lobby, diamond trading, etc make vast fortunes through death and destruction.
posted by Metacircular at 3:00 PM on December 29, 2023 [8 favorites]

The "Private equity response" link is giving me an error which seems appropriate because what can you even say? And, without trying to be defeatist, what can you do? I can't just not use hospitals if I need one. I don't know that anyone is running on a platform that really opposes this so I don't know how voting is the answer. They don't think they need to give us a response beyond "so what, what are you going to do about it?" and I don't have a great response for that, at least not one appropriate for this website.

Some states, primarily blue ones, have mechanisms for oversight of transactions involving healthcare entities, with varying levels of teeth. Here in Oregon, a couple years ago the legislature passed a bill creating the Health Care Market Oversight program, which gave the state health agency actual appoval/denial authority over most major health industry mergers/acquisitions/etc in the state, based on their expected impact on cost, quality, access, and equity. The program only been in existence for a year or two and so far has either approved outright or approved with conditions most submitted transactions, but there are a couple of major ones on the docket soon that I think there's a good chance the state will either deny or put major restrictions on.

So that's one possible avenue -- push your state legislature to create an oversight mechanism if you don't have one, or to strengthen it if you do.
posted by bassooner at 3:06 PM on December 29, 2023 [4 favorites]

In other public health contexts where these statistics would be present, this would be considered a crisis that would require attention by government at all levels.

It illuminates how the capitalist model for healthcare is parasitic, and how its continued presence is a signifier of the power it wields over our wellbeing and day-to-day life.
posted by They sucked his brains out! at 3:11 PM on December 29, 2023 [2 favorites]

Here in the Bay Area, if you have a kid on the spectrum, good luck finding an ABA provider, the standard therapeutic thing, because most of them have been bought by private equity firms and gutted. These people are criminals, pure and simple. Fuck capitalism.
posted by njohnson23 at 3:37 PM on December 29, 2023 [3 favorites]

Mod note: replaced the link in the post but it's still sending occasional Cloudflare errors. It's not us, sorry!
posted by jessamyn (staff) at 3:48 PM on December 29, 2023 [3 favorites]

replaced the link in the post but it's still sending occasional Cloudflare errors. It's not us, sorry!

Thanks for looking into it. Looks like it might be that when the referrer header is metafilter.com, it doesn't work, but when it's CNN or nothing it works?

So you can copy-and-paste the link into a new tab and it works, or open it in an incognito window.

You just can't click on it directly.

Weird.
posted by clawsoon at 4:04 PM on December 29, 2023 [1 favorite]

I'm glad to hear that some website at some point in the past had us completely DDOS their servers with our attention and they still have code in their web servers to keep this from happening again.

Our reputation continues!!!
posted by hippybear at 4:08 PM on December 29, 2023 [7 favorites]

I just read "Plunder" by Brendan Ballou, which goes into great details about why private equity controlled hospitals (and nursing homes and many other similar places) tend to perform worse. It's a disheartening and eye-opening read.
posted by of strange foe at 4:47 PM on December 29, 2023 [2 favorites]

The Private Equity Hospital Tracker (PESP), a current list of all private equity-owned hospitals in the U.S.

1) At least 386 US hospitals are owned by private equity firms. That represents:
--> 9% of all private hospitals
--> 30% of all proprietary for-profit hospitals

2) Over a third (34%) of private equity-owned hospitals serve rural populations.

3) A handful of private equity firms dominate the list of private equity-owned hospitals: Apollo Global Management (LifePoint Health, ScionHealth), Equity Group Investments (Ardent Health Services), One Equity Partners (Ernest Health), GoldenTree Asset Management and Davidson Kempner (Quorum Health), Surgery Partners (Bain Capital), and Webster Equity Partners (Oceans Healthcare).

4) Texas has the most private equity-owned hospitals (85).

5) New Mexico has the highest proportion of private equity-owned hospitals (43%).

6) Nearly a quarter (24.1%) of private equity-owned facilities are psychiatric hospitals.
posted by Iris Gambol at 5:12 PM on December 29, 2023 [12 favorites]

"PESP" stands for Private Equity Stakeholder Project.
posted by Iris Gambol at 5:15 PM on December 29, 2023 [2 favorites]

I started to wonder about the hole that Private Equity swooped in to fill, and I'm sure the history there is worth exploring, but my brain went immediately to: if not PE, who would be providing the investment to keep these health concerns going? Not who could, or should, or who I'd like to provide the necessary investment , but in the year 2024 in the United States of Oligarchs, how realistically would these bills get paid? At least half of all politicians, and likely a greater share of those who tell the politicians when to jump and how high, have a permanent hard-on for lower-to-no taxes and shoveling money towards those who already have it instead of those who need it. Is there money, somewhere, that could be spent on this? Surely. Will there in the next several years -- minimum time necessary to enact and implement meaningful change in this space -- be the political will to re-allocate said money to this cause? For decades there has been intentional structural underinvestment in rural communities ; do we expect the politicians who've made it legal for their healthcare-industry donors to make healthcare increasingly unaffordable, to somehow instantiate any of the kind of change that would make PE involvement unnecessary?

Personally I'd like PE to be wiped off the map and all who drive it to suffer greatly as a result. I don't know who's got an actionable plan for doing that, or at least, decreasing PE's legalized malfeasance, ahem activity, in the health care space.

That being said, I'm grateful for this research and this post that shares it with us.
posted by jerome powell buys his sweatbands in bulk only at 7:08 PM on December 29, 2023 [3 favorites]

If you're interested in private equity in health care, last year the New Yorker did an absolutely fascinating piece on private-equity-owned hospice companies. I have never been so horrified about the circumstances under which I might someday die.
posted by Jeanne at 7:09 PM on December 29, 2023 [1 favorite]

jerome […], you write as though private equity takeovers are putting money into healthcare that would otherwise have to be provided by government. But private equity takes money out of its prey, it doesn’t put money in. If it wasn’t around, starved health systems would (at the worst) still go bankrupt but more slowly.
posted by clew at 8:36 PM on December 29, 2023 [6 favorites]

Like schools and the fire department, hospitals aren't there to make money, they are there to provide a service. Putting commerce into it ruins it sooner or later.
Note: am Canadian.
posted by PennD at 10:35 PM on December 29, 2023 [11 favorites]

Ugh. Remember how the US Senate said that healthcare and childcare weren't "infrastructure" enough for them? Yeah that was stupid
posted by eustatic at 5:00 AM on December 30, 2023 [3 favorites]

You are lucky if you get a chat bot.
posted by DJZouke at 5:10 AM on December 30, 2023

How can we reach those people who believe in the invisible hand of the market, and convince them of the negatives of late capitalism? Like, what’s the trick?

The trick, I think, is that governments have to force the issue. (Meaning effort needs to be made to elect those politicians who will do so.) IOW, we're not going to convince a lot of those people ahead of time.

Because millions of people look at their paystubs and go, "Fuck! I earned $2000 but only $1400 went into my bank account, and it says right there in black and white TAXES." Argue all you want about how taxes pay for roads & fire departments & whatever other indirect & diffuse public goods & services, it won't defeat the immediate emotional self-centered response of "I really wish I had that additional $600 right now this moment, because I need new tires! Fuck these taxes!"

If & when we get whatever form of universal health care or expanded Obamacare or expanded Medicare or however it comes about, people will see a real immediate personal boost in income - they might pay another $100 in taxes but they no longer have to pay $1000 a month to a private health insurance company, and when they go to the doctor it costs $25 total not $40 for the visit plus oh yeah $450 for the additional testing.

Mind you, they'll still complain about how taxes are terrible and governments are dumb, but once that immediate personal financial benefit is established, it's going to be near impossible to take away.
posted by soundguy99 at 10:08 AM on December 30, 2023

I remember as a kid thinking doctors and hospitals (and firefighters) were government employees, like cops.
So naive of me to think of something as a public good when it isn't beating and throwing people in prisons.
posted by symbioid at 1:44 PM on December 30, 2023 [1 favorite]

Firefighters aren’t government employees?
posted by Tell Me No Lies at 4:38 PM on December 30, 2023

Firefighters weren't public at first. You'd hang a shield on your house designating which fire agency you were paying to keep your property from burning down. Over time they figured out that mounting a united effort kept fires from spreading property to property and so made it a public agency.
posted by hippybear at 5:41 PM on December 30, 2023 [2 favorites]

Also lots of places in the US use volunteer fire departments. One of our local ones had a sign for a while

Become a firefighter!
Pay $0 / hr
Cool uniform tho
posted by GCU Sweet and Full of Grace at 5:58 PM on December 30, 2023 [3 favorites]

is there a relatively accessible way to determine what hospitals in a given area are owned by private equity? this could be useful on an individual level, for determining which hospitals to avoid, on a community level, by posting/talking about those hospitals, and on a research level, as a tool to help answer the questions that tell me no lies posed above.

If one is already going to put in the effort to figure out how to avoid the PE hospitals, I would suggest instead looking into outcomes in all the hospitals to find which ones to avoid. PE does generally have worse outcomes on average, but on an individual level, there's no guarantee the local hospital is better.

It's nice to not support the worst of capitalism and all that, but given the state of our healthcare system right now, the main criteria should really be outcomes, not the supplier. I mean, the first season of Dr. Death is about a surgeon who is maiming people at public hospitals in Texas.

... I'd like to see a break down listing the 51 hospitals, owners, and the raised or lowered quality.

Yes exactly. It is good to know that on average, PE has worse outcomes. But that doesnt mean anything for me personally on a local level.
posted by LizBoBiz at 5:30 PM on January 1 [1 favorite]