Comment by hermanzegerman
21 hours ago
We already know that Private Equity kills people in the hospitals [1] and nursing homes [2] for profit. So why do we continue to allow them to operate Healthcare facilities?
[1] https://jamanetwork.com/journals/jama/fullarticle/2813379
Releasing an almost-3,000-page expose on private equity this week.
It's hard to argue against those who say private equity ruins everything. It's astonishing. And massively depressing.
You can download for free when you search the 'net for Founderstowne.
I'm looking forward to reading your book! Part of my expose of PE in the veterinary business can be found at https://www.privateequityvet.org
Wish I had your knowledge before writing...
Pages in my book related to how private-equity screwed over the vet industry: 250. 442. 1001.
I think people will be blown away that the company that makes M&Ms owns a ton of vets.
Wait so are you doing the journalistic action? I can't wait for this to drop. Please give me more details if possible.
Massive respects to your journalism, I have a lot of questions regarding this tho, namely how long did it take you to build this expose and where are you gonna drop it because I searched net for Founderstowne but I didn't find anything special, are they the VC fund you are gonna expose?
Can I post a direct link here... don't want to be accused of spam?
I expose just about everyone as a "roman a clef" (a work of "fiction":>).
I'm 58 years old. Entrepreneurial builder. Disgusted by VC/PE. Been writing this book since 1987.
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Please name names when you do.
I name names. (Mostly.)
When I get sued (and I will), I'll employ "roman a clef" and slightly fictionalize the names.
By the way, VCs are not exactly any better than PE firms.
I've tried to reach out Marc Andreesen to see if he can 100% pivot to building instead of extracting. I'm encouraged by his latest fund.
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Because we have governments anemic to running anything or regulating any business.
They are much more likely to continue shoveling cash into private businesses through subsidies then to want to setup and/or run the same business for a fraction of the cost.
This comment is weird to me. The US has one of the most effective environmental regulators in the world (EPA). The FAA and FDA are also excellent. The securities markets in the US are the global gold standard of regulation (SEC, etc.).
Certainly. These are institutions that have mostly been created during the progressive era of the US. The EPA (I believe) is the latest of these organizations.
Since roughly Reagan, the US has been either fully dismantling, defunding, or privatizing these institutions.
We've seen the FAA start to rely too heavily on the likes of Boeing to set regulation standards. The FDA has relied heavily on fees from private institutions to function and it's weakening due to that improper mixing has resulted in the likes of the Vioxx scandal.
Medicare is a good example of this. Under Clinton, rather than expanding or reforming medicare he introduced a plan to allow private insurance companies to get government dollars (medicare part c).
Think the word that fits there is "allergic".
The same one who just said PE isn't allowed to buy any more residential real estate?
I hope they go after hospitals next.
> The same one who just said PE isn't allowed to buy any more residential real estate?
We'll see. That was just an EO. That doesn't really have the force of law behind it. There's not a regulatory body (AFAIK) that would or could prevent PE from gobbling up a home.
But if there's a route to stop it then I'm not opposed to it. PE buying essential goods and industries is bad for everyone.
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He says about 500 things a week and rarely followed through. They have gone after anyone yet so I wouldn't be thinking about "next"
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NB: “single family homes” not “residential real estate”
I’ve been hoping to meet one of the marks for the ol’ “tweet means he did it” thing in year 5. Hello!
Government is probably the worst actor to run healthcare facilities. It’s not that different from PE, except with more administrative bloat. I’d be curious to compare US PE run facilities with government run facilities in Canada.
There is not an easy answer here, it basically a cost centre that whoever runs it, the welfare state is incentivized to spend as little as possible on it. PE is almost certainly a bad solution. If they can destroy a restaurant or other low impact business, I hate to think what they’d do to businesses that care for people. You’d get the healthcare equivalent of Burger King. But with government you get the equivalent of the DMV.
Canada's healthcare is generally cheaper per capita, pays healthcare workers less and has far lower administrative costs than the US. The US spends 5x the average of other wealthy countries on administrative costs [1]. This line that the government is automatically inefficient and terrible at anything at all is not true, is not set in stone and does not preclude private industry being even more greedy, stupid, amoral and inefficient than the government.
[1] https://www.pgpf.org/article/how-does-the-us-healthcare-syst...
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> I’d be curious to compare US PE run facilities with government run facilities in Canada.
You don't have to do that, we have US government ran facilities. It's the VA.
And if you look at the costs associated with the VA, they are much much cheaper than almost any private care [1].
And if you know a few vets, you know they almost universally love the VA. It's one of the best perks of serving in the military.
[1] https://www.herc.research.va.gov/include/page.asp?ID=inpatie...
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Huh the government is the ideal party to do that. Because it can set its goals to best serve its constituents instead of making money.
Don't forget there are so many countries with government healthcare and their care is a lot more accessible than the US's. I've lived in many countries and a nationalised healthcare system is one of the things I select for.
Even a poor country like Cuba has one of the highest numbers of doctors per capita. Unfortunately a bit hamstrung by the US's illegal and needless sanctions so they can't get proper equipment but I've been told healthcare is still pretty excellent there.
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Government is probably the worst actor to run healthcare facilities
Are those your gut feelings, or do you have an argument to back it up?
In reality, the outcomes from Government operated hospitals in Scandinavian Countries do not need to hide behind those of other countries, especially not with the US
https://jamanetwork.com/journals/jamainternalmedicine/fullar...
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> why do we continue to allow them to operate Healthcare facilities?
We don’t want to pay for them. When private equity is forced to sell, someone has to buy or the providers get shuttered.
On the other hand, we’re clearly willing to blow the money and deficit on stupid stuff. But only if it goes boom, apparently.
Who do you mean by "we", here?
The only possible entities who could buy a company are either a bigger company, or private equity.
That the leavings of a PE business are unattractive to either of them is not a surprise.
That has nothing to do with what society at large (a better definition of "we") actually wants or needs.
> The only possible entities who could buy a company are either a bigger company, or private equity.
The American mind virus at work.
My (non-US) state government literally purchased a private hospital late last year. Now it’s public.
Keep telling yourself that corporations are going to save you. Maybe it’ll happen eventually.
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They could be owned by Physicians or by the Local Government. But the US has practically banned the first one
https://www.cms.gov/medicare/regulations-guidance/physician-...
> Who do you mean by "we", here?
Voters, broadly and monolithically.
> only possible entities who could buy a company are either a bigger company, or private equity
Communities. Forcing PE to divest from healthcare would require setting up a lending facility communities can borrow from to buy back their healthcare infrastructure. (Or have the government just buy it outright.)
I guess you could make it work as a window-dressing bill. Force PE to divest. Leave unsaid that you’re letting billionaires and family offices buy it up to continue the same shit. But actually solving the problem means ponying up cash to buy this stuff back. Even if it’s out of bankruptcy. (I’m not even touching the politics of paying PE and its lenders with public money.)
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> We don’t want to pay for them.
Perhaps we should have kept taxing the rich the we did during WW2 and the few decades following it? No, clearly that would never work!
> we should have kept taxing the rich the we did during WW2 and the few decades following it?
Genuine question: source for any of the rich having paid more in the 50s than they did in the 90s? My understanding is that while published rates were high, effective rates were roughly flat until the Bush and Trump tax cuts.
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>> > why do we continue to allow them to operate Healthcare facilities?
We don’t want to pay for them. When private equity is forced to sell, someone has to buy or the providers get shuttered.
Sell? The point is that PE should never have purchased these things in the first place.
> The point is that PE should never have purchased these things in the first place
You can change the present. Not the past. Private equity owns these things. If you want them to not own it, you have to buy it back. Even if out of bankruptcy. Even if via eminent domain. Then you have to run it. All of that costs money.
You're missing the point. It's too late to unwind those transactions.
In theory state or federal governments could seize ownership of those healthcare provider organizations. But then legally the government would be forced to compensate the current owners at fair market value.
Your citation's statistics [1] actually says the exact opposite of your claim!
It shows a -0.2pp DECREASE in in-hospital mortality, with no significant change on 7 or 30 day mortality. The authors suggest this could be due to:
* selecting for healthier patients - the paper shows an average change of 0.1 years younger for patients. this is not significant!
* transferring out sicker patients - 30 day mortality would show this (it doesn't), and the transfer rate does not change meaningfully
So based on the evidence you have provided, private equity purchasing hospitals saves lives. Maybe that is wrong, but it is the conclusion of that evidence.
They also don't claim PE is killing people in the conclusion; did you read the paper?
The age difference was significant
They've had more bloodstream infections, surgical infections, and falls. Everything which traces back to staff cuts and lack of hygiene.
Also they dumped the complicated, and probably expensive cases to real hospitals In contrast, transfers to other acute care hospitals increased 12.2% at private equity hospitals compared with control hospitals
Because between the 1970s and 1990s, Western nations decided that private operations should be the default for everything except where the law specifically requires state institutions, instead of the other way round.
In many countries, essential services like hospitals, drinking water supply, airport security, schools, even prisons are now partially or fully privatized. It seems insane when you think about it, but that’s what your grandparents voted for.
How would this work the other way around? The state provides cheeseburgers and fidget spinners until someone writes a law requiring private industry to provide these things? Isn't there a sort of lack of freedom inherent in forcing people to get all their cheeseburgers from a single place?
The other way around would be having public options except where explicitly forbidden. The existence of a public option does not forbid private options. For example the existence of the USPS does not forbid UPS or Fedex or Amazon from operating delivery services, which may be preferable for many customers. But the public option guarantees that a certain level of service is available to anyone and makes it impossible for any private entity to secure a monopoly. It also is very sensible in cases of natural monopoly (power plants, international airports, prisons, wastewater treatment centers) where there's never going to be any meaningful competition that the government should own and operate the monopoly.
Yes, but there's also a lack of freedom inherent in denying people healthcare and other public services because they can't afford them.
Government is fundamental. Business is art.
yeah that probably isn't what they actually meant, obviously
I wonder if who owns it is a red herring, but routing out corruption and bad incentives is the key.
Government runs anything that regulation alone cant make safe.
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Private is the default solution for all problems. The state only provides a service when the government takes action to do so, and usually this is on top of whatever existing private infrastructure there is.
This seems like a pretty weird perspective to have?
A mix of public and private can work with proper regulation (especially when combined with state owned private companies).
This article only refers to the US. This is the second time I've brought it up over the last week, but it'd be nice if the US and "the west" weren't constantly conflated.
Not all of us have fucked over their citizens and spiraled into borderline dictatorships that are well on their way to becoming international pariahs as much as the US have.
Everything suddenly makes a lot more sense once you realize the US is a developing country, one that happens to control the global money printer (due to a few accidents of history).
It's the only developing country that is also "first-world" or "western", and unfortunately, also the most powerful of those.
> It seems insane when you think about it, but that’s what your grandparents voted for.
Our grandparents wanted a nice hospital and that's what they voted for. The people they elected needed funds to build the hospital, so they sought funding. The IMF and World Bank said "sure, we'll help you fund it. But in order to do so, you need to privatize your healthcare industry."
Our grandparents got a nice hospital for a while, the politicians got another 4 years in power, and a few years later we noticed that our free healthcare was gone.
This, multiplied across the entire developing world.
Private equity's destruction goes FAR beyond hospitals, nursing homes and vets:
Healthcare
Had a creepy interaction with Fraser. They absolutely did a marketing spiel and sounded nothing like a medical intervention.
When you review the findings on the standard behavioral intervention, autism, on average requires 2.5 years of 40hr/week.
Thats basically one persons job.