Reading about the horrors resulting from private equity’s expansion into U.S. healthcare I imagine is akin to what pathology interns experience. Seeing a body cracked, gutted, and filleted no doubt is haunting watching one’s first autopsy, but over time I expect it becomes pretty routine. I once interviewed a coroner in Michigan’s Oakland County and was taken aback by how cavalier she was discussing an autopsy on someone who died undergoing a routine colonoscopy. For her, it was just another day at the office.
In the past two years I’ve been educating myself about U.S. healthcare, which private equity increasingly has come to dominate. If there’s even one example where private equity involvement has led to an improvement in patient care, I’ve yet to read about it. The patient care harm private equity’s greed has caused is well known and documented. A study released last year revealed that nursing homes acquired by private equity firms experienced a 10 percent short-term increase in their mortality rates. I wouldn’t fly an airline with those kinds of odds.
BuzzFeed this week published an expose on BrightSpring Health Services, one of the nation’s largest group home operators, which was acquired in 2019 by KKR. I thought I’d developed a natural immunity to the healthcare horrors of private equity, but even I was shocked by what BuzzFeed uncovered. That such impressive journalism appeared in BuzzFeed also came as a surprise. I’ve long associated BuzzFeed with exploding watermelons and “fake news,” notably the time it published details of the discredited “Pee Pee” dossier.
Only persons with ice in their veins could read BuzzFeed’s story and not be saddened and outraged.
What BuzzFeed uncovered about BrightSpring’s ownership under KKR is most disturbing and of national significance. BrightSpring operates more than 600 residential facilities in all 50 states, supposedly “caring” for disabled persons, some of whom can’t speak, bathe, or feed themselves. Four BuzzFeed reporters compiled a painstakingly detailed report about people with severe disabilities under BrightSpring’s care suffering abuse and neglect, sometimes resulting in death.
In one incident, a patient wandered off, and no one noticed; he was hit by a car going 45 miles per hour. A resident who was left unattended drank antifreeze; he did not receive medical care for at least nine hours. Another choked to death while inadequately trained staff members called their supervisor instead of 911. People were given the wrong medicine or no medicine at all. And a woman who didn’t speak was pinned to her bed with a makeshift restraint and left alone and struggling. After multiple injuries, she died.
BuzzFeed’s reporters conducted an ambitious digital analysis of public records revealing that from when KKR took over BrightSpring in March 2019 through the end of 2021, its “intermediate care facilities” were cited for dangerous conditions at a rate well above the average for such facilities. In the seven states with the most for-profit facilities, KKR owns only 16% of the homes but racked up 40% of the serious citations, more than 500 in total.
That BrightSpring experienced staffing issues hardly comes as a surprise. BuzzFeed reported that nurses quit in droves, afraid that remaining in their jobs could cost them their licenses. BuzzFeed reported that BrightSpring has difficulty attracting staff, hardly a surprise given the company’s facilities pay less than the local Walmart. Staff-to-resident ratios sometimes rose to as high as 1 to 21.
According to reports in the seven states analyzed by BuzzFeed News, inspectors found 118 instances of dangerously low staffing since KKR acquired BrightSpring — double the rate of all other facilities. The severity of the staff shortage was such that BrightSpring employees were threatened they’d be charged with criminal neglect if they declined to work past their assigned shifts, resulting in some of them working for three days straight.
Not surprisingly, KKR took issue with the story. “We vehemently disagree with the grossly misleading narrative you presented,” KKR said in a statement. Hard to believe the firm paid some crisis communications firm big bucks to draft that kind of lame denial, further undermined by the fact KKR representatives refused to meet with BuzzFeed, instead threatening the publication with litigation.
BrightSpring isn’t KKR’s first appearance in the healthcare rodeo of shame. The firm is the proud owner of a controversial ER staffing company called Envision, which was investigated by Congress for its pioneering “surprise billing” practices and was forced to pay a Kansas ER doc more than $26 million in a wrongful termination lawsuit alleging he was fired after complaining about unsafe staffing levels. According to BuzzFeed, KKR’s Johnny Kim sits on the boards of both BrightSpring and Envision, although Kim’s KKR bio makes no mention of his BrightSpring directorship. Maybe Kim is too modest to publicly disclose all the good he does in the world.
BuzzFeed admirably noted that KKR gets its funding from state pension funds and other public entities, including Washington, Oregon, New York, and California’s teachers’ union. California’s teachers’ union issued a statement saying, “we actively monitor all our investments for financial, strategic, and environmental, social and governance (ESG) risks,” reaffirming my view that ESG metrics are nothing more than moral hocus pocus allowing investors to feel good profiting from shameful activities and practices. Elon Musk shares my dim view of ESG investing.
BuzzFeed also noted that Henry Kravis, one of the founders of KKR and its co-executive chairman, has his name posted over a wing at the Metropolitan Museum of Art. Kravis’ spouse, Marie-Josee Kravis, last year was named board chair of the Museum of Modern Art.
Seeing the Kravis’ Met connection got me wondering how the trustees of New York’s elite museums calibrate their moral compasses. Marie-Josee replaced hedge funder Leon Black, who some trustees reportedly wanted removed because of the billionaire’s connections to convicted sex offender Jeffrey Epstein. The Met last year removed the names of the Sackler family because their company Purdue Pharma pleaded guilty to criminal charges related to the marketing of the addictive painkiller OxyContin in 2020.
Yet the Met is okay benefitting from activities that are harming the healthcare of Americans, including those who can’t take care of themselves. Another donor and welcomed person at the Met’s annual high society ball is Stephen Schwarzman, CEO of Blackstone. Blackstone’s aggressive acquisition of global residential properties and driving people from their homes during the pandemic prompted lawyers normally focused on human rights issues to write to Schwarzman personally.
“The financialization of housing is having a grave impact on the enjoyment of the right to adequate housing for millions of people across the world,” the lawyers wrote. “As one of the largest real estate private equity companies in the world, with $136 billion of assets under management, operating in North America, Europe, Asia and Latin America, your practices are significantly contributing to this.”
Blackstone also controls TeamHealth, a rival ER staffing firm to KKR’s Envision. Here’s a taste of Envision’s business practices.
Given the Met’s rejection of the Sackler family, I’m curious if the museum will formally ban any dealings with McKinsey, whose consultants it was revealed last week were advising Purdue Pharma and other opioid producers while also doing work for government agencies tasked with regulating opioid abuse. The FDA has taken a stand against the consulting firm.
I’ve toyed with this idea of trying to organize artists and photographers around the world to contribute to an exhibit I’d call “The Victims of Private Equity.” The exhibit would feature people and places harmed by the greed of some of private equity’s biggest players. I’m guessing my exhibit wouldn’t find a home at the Met or MoMa.
It’s disappointing how little pickup BuzzFeed’s story has so far received, particularly since it reflects a rare instance of quality journalism these days. Legacy journalists prefer to promote and debate the TikTok journalism of the Washington Post’s Taylor Lorenz, who has discredited the once storied publication and will possibly remove the legacy media’s last shreds of credibility and dignity.
Take a bow Kendall Taggart, John Templon, Anthony Cormier, and Jason Leopold, the BuzzFeed reporters responsible for BuzzFeed’s BrightSpring expose. While the findings resulting from your prodigious work are most disturbing, it’s heartening to know there are still some young reporters who understand that journalism isn’t about personal brand promotion but rather to comfort the afflicted and afflict the comfortable.