The other day a Michigan source forwarded me a 2019 article from Hospice News about a little noticed report from the Government Accountability Office with some alarming statistics about for-profit hospices. Among the GAO’s findings: Dying patients at for-profit hospices are less likely to have at least one visit from a registered nurse, physician, nurse practitioner, or physician assistant in the last three days of life.

Another finding: More than 460 for-profit hospice providers discharged half of their patients or more prior to death, compared to only 10 nonprofits that had similar rates.

It was news to me that even hospice care in the U.S. had fallen prey to corporate profiteers, but I obviously haven’t been paying close enough attention. In the 1980s and 90s virtually all hospice care in the U.S. was provided by nonprofits. By 2019, for-profit hospices cared for 51 percent of all hospice patients. Their share of the market undoubtably has increased substantially since then.  

Dr. Joan Teno

What kind of company or person would seek to profit off dying people, especially denying them medical care in the last days of their life I wondered? On a hunch, I searched “hospice care and private equity.” Wouldn’t you know, I immediately found  this September 2021 paper by Joan Teno, an award-winning doctor and one of the leading authorities on hospice care, calling on Congress to better regulate the industry because of her concerns about private equity’s growing involvement.

“To protect people who need hospice care, Congress must urgently provide oversight for this vulnerable population,” Teno warned in her paper published on the JAMA Health Forum.

Between 2011 and 2019, there were 409 private equity transactions in hospice, with 58 percent of those transactions involving the purchase of a nonprofit agency, according to stats cited by Teno. Approximately 16 percent of hospice patients are cared by hospices that are owned by either private equity or publicly traded corporations. Teno said hospice care is subject to poor regulatory oversight and transparency, and the little that’s known is reason for concern.

“Research has documented important concerns with for-profit hospices in terms of complaints,” Teno wrote. “One study found greater use of less-skilled clinical staff by for-profit hospices, and that 90 percent of for-profit hospices had the lowest spending on direct patient care and highest rates of hospital use. Because of the private equity model of short-term profits, these concerns may be magnified with more aggressive tactics around cost-cutting and profit maximization.”

Providing quality care for the elderly isn’t what floats private equity boats. A study released last year found that nursing homes acquired by private equity firms experienced a 10 percent short-term increase in their mortality rates. The study’s findings were based on Medicare and Medicaid data covering more than 18,000 nursing homes between 2004 and 2019. Private equity firms own about 11 percent of nursing facilities nationwide.

Constantine Yannelis Senate testimony

“We crunched the figures to determine the main metric – mortality rates over this 15-year period,” Constantine Yannelis, one of the study’s researchers, said in an interview with Chicago Booth Review. “What we found is that in the private equity-acquired nursing homes, this 10 percent hike in mortality translates to more than 20,000 additional deaths relative to other homes during this time frame. That’s more than 1,000 deaths every year, on average.”

It’s not reckless or irresponsible to speculate that private equity is prematurely killing countless other Americans. The parasitic industry’s slimy tentacles have latched on to virtually all areas of healthcare, from emergency room medicine to dermatology practices. Estimated PE annual deal values increased to 119 billion in 2019 from $41.5 billion in 2010, for a total of approximately $750 billion over the past decade.

Private equity’s pervasive harm to U.S. healthcare is well known and covered by media of all political persuasions. In 2019, American Prospect published this article headlined, “How Private Equity Makes You Sicker,” detailing how these firms have consolidated hospitals across the country, leading to closures, higher prices, and human suffering.

For a taste of what can happen when a private equity firm acquires a hospital, read this ProPublica story about how a PE firm in cahoots with the CEO extracted more than $400 million from a hospital chain that couldn’t pay for medical supplies or gas for ambulances. The chain, which served low-income patients, suffered a litany of problems including broken elevators, dirty surgical gear, bedbugs and more. Bloomberg in May 2020 published this story headlined, “How Private Equity Is Ruining American Healthcare,” and revealed what happens to physician practices when private equity firms gain financial control. If you take the time to read it, I’m confident you’ll think twice about entrusting your pimples or other skin issues to a dermatology practice owned by private equity.

Private equity is all about buying companies and loading them with massive debt, some of which goes to pay the firms a fee to manage the businesses. (Yes, it’s legal). To make their deals work, they cut costs and raise prices, resulting in patients paying more for poorer care. Private equity is behind much of the so-called “surprise billing” practices, where patients go to a hospital in their health network and find out after the fact the medical staff who treated them didn’t work for the hospital. Although Congress has curbed the practice, private equity firms managed to carve out some exceptions that benefit their healthcare businesses.

One way PE firms cut costs is reducing staff. Another is substituting considerably lesser trained physician assistants and nurse practitioners for doctors, allowing them to work with little, if any, physician oversight. “Patients At Risk,” a book I highly recommend, is dedicated to Alexus Jamel Ochoa-Dockins, a promising young athlete who died because she was misdiagnosed by a physician assistant when she sought treatment at a Oklahoma hospital emergency room.

Two private equity-owned firms – Blackstone Group’s TeamHealth and KKR-owned EmCare – provide about one-third of America’s hospital emergency room staffing. In April of last year, a jury awarded an EmCare physician $26 million for wrongful termination after he warned that his ER was understaffed and putting patients at risk. In March 2020, a TeamHealth doctor was removed from his hospital after warning about safety issues relating to the pandemic.

According to figures provided by United Healthcare to NBC News in May 2020, TeamHealth’s billing practices far exceeded median charges. The median charge to treat chest pains was $340; TeamHealth billed $976. The median charge for stiches on a minor cut was $200, compared with $888 from TeamHealth. The median rate for a broken arm was $665; TeamHealth charged $2,947, giving new meaning to the expression “being charged an arm and a leg.”

TeamHealth’s charges obviously spoke for themselves because the company’s spokesperson was too tongue tied to give NBC News a comment.

TeamHealth will go to great lengths to suck patients dry. In 2019, ProPublica and MLK50 revealed in a report that TeamHealth was aggressively suing poor people, in one instance filing a lawsuit against a woman for $8,500 – a third of what her husband made as a cook. TeamHealth said it would stop suing poor people after its collection practices were exposed.

Admittedly, private equity isn’t the only cancer plaguing U.S. healthcare. The industry is so rife with corruption, conflicts, and other questionable business practices that those in the know openly refer to it as a cartel. Hospital managers, suppliers, and purchasing organizations benefit handsomely from all the wrongdoing, while doctors, nurses, and other medical professionals aren’t properly compensated given their dedication and contributions to society. America would suffer greatly if all doctors and nurses walked off the job for a week. If private equity executives exited en masse, the country would be better off.

Little wonder the U.S. has the worst healthcare system overall among 11 high-income countries, despite spending the highest proportion of its gross domestic product on healthcare.  It also shouldn’t come as a surprise that the life expectancy of Americans is sliding; in 2021, the gap in life expectancy between the U.S. and peer countries widened to more than five years, according to a study published last week.

The study’s authors, a sociologist and a doctor specializing in population health and health equity, strike me as academic wokesters in that they blamed lower U.S. vaccination rates and masking compliance as the reasons for America’s continuing life expectancy decline. Canada’s mortality rate from covid is one-third the rate of the U.S.; while higher vaccination rates and masking compliance may account for some of the differential, Canada’s health system is ranked considerably better than the U.S., despite having significantly fewer beds per capita.

“America’s outcomes are almost inexplicable given the scientific and medical firepower of the USA,” David Naylor, a physician and former University of Toronto president, told Bloomberg. “With regret, I’d have to say that America’s radical under-performance in protecting its citizens from viral disease and death is a symptom of a deep-seated political malaise in their federation.”

Private equity firms are controlled by executives Donald Trump would no doubt call “some very fine people,” given that Blackstone Group CEO Stephen Schwarzman headed Trump’s business advisory council. The pandemic has been very good to Schwarzman; in 2021, Schwarzman collected $1.1 billion in pay and dividends, while Blackstone president Jon Gray scrimped by on $323.8 million. Underscoring Schwarzman’s views on social responsibility, he famously compared Obama-era tax hikes on corporations to Hitler invading Poland.

Billionaire Tony James, who retired as Blackstone executive vice chairman last December, is a major contributor to Democratic candidates and causes. Jeffrey Zients, who steps down this week as President Biden’s covid czar and co-headed his transition committee, became a millionaire before turning 40 wheeling and dealing healthcare companies, some engaged in billing practices that American Prospect revealed last week allegedly engaged in fraud, triggering hundreds of millions in fines.

Prior to joining the Biden Administration, Zients was CEO of a holding company called The Cranemere Group, which under his watch acquired NorthStar Anesthesia, a controversial outsourcing company which figured prominently into the decline of Michigan’s Beaumont Health and the death of a patient while undergoing a routine colonoscopy. ProPublica in February reported about NorthStar billing a kidney donor more than $13,000 and aggressively pursuing him for collection on the bill. (Living donors aren’t supposed to be billed for transplant related care.) NorthStar was previously owned by a private equity firm.

The U.S. Constitution guarantees Americans “Life, Liberty, and pursuit of Happiness.” Private equity firms are denying an increasing number of Americans that inherent right. In terms of American life, private equity is clearly shortening it. Medical bills are the No. 1 cause of bankruptcy in the U.S.; 70 percent of Americans with medical bills had to cut their food expenses to avoid bankruptcy. One can’t achieve or maintain happiness in failing health or having their life savings wiped out because of the misfortune of illness. Indebtedness that can never be repaid is economic slavery.

Throughout history, gross disparities in wealth have invariably led to political turmoil and revolutions. Ray Dalio, the successful billionaire investor, in February warned that America is at risk of civil war. Robert Kiyosaki, the author and motivational speaker, just warned about another possible American Revolution.

Seems to me that guillotine manufacturing might become a growth business. It wouldn’t surprise me if Blackstone has already bought up all the patents.

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