Private Equity, Greed, and the Deterioration of Medical Care in the United States

Wikimedia Commons: 16th Annual Global Private Equity Conference

by Empea1077, C. C. Attribution-Share Alike 4.0

                                    Wikimedia Commons: 16th Annual Global Private Equity Conference     

 

This post discusses highly troublesome recent developments in the practice of medicine, including in psychiatry. So-called private equity firms have been buying up businesses, streamlining them by cutting staff and making employees work longer hours, loading them up with debt, and stripping out their assets. And then they sell them off at a big profit. They take the money and run, often leaving a hollowed-out shell of a company behind. At present in the United States, they have been buying up medical practices and hospitals at an alarming rate. Are your doctors spending less and less time with you and discharging you form hospital stays prematurely? This may be the reason.

In one recent example from April, financially-strapped Steward Health Care sold its nationwide physician practice to UnitedHealth Group subsidiary Optum. In the wake of this, a U.S. Senate subcommittee met in Boston to address ongoing concerns that the corporatization of healthcare is putting patients and providers at risk. Private equity companies across the country were said to be quietly making profits while infiltrating everything from fertility care to hospice care.

In the case of Steward, the roots of this date back to 2010, when the private equity firm Cerberus Capital Management agreed to acquire the financially struggling non-profit Caritas Christi health system in Massachusetts for more than $800 million. That company now operates more than 30 hospitals as the country's largest private for-profit hospital chain, but Cerberus has been selling off its stake in Steward, leaving the chain saddled with large financial liabilities that are causing future hospital shutdowns.

While screwing over an already struggling hospital system, executives were reaping profits. According to the Wall Street Journal, as the Steward ship was sinking, the CEO bought a $40M yacht!

Ellana Stinson, an emergency medicine physician at Boston Medical Center and president of the New England Medical Association, testified that, "Practicing medicine in PE [private equity]-led places is no longer about patient safety or quality, but about making medical decisions and judgements due to corporate decision-making with profit motives at the expense of patients." Many buyouts are of hospitals and other facilities that are already struggling and may have higher Medicaid and Medicare populations.

Stinson pointed to the more than 550 emergency residency positions that notably went unfilled  in last year's Match cycle as representative of ongoing concerns about this issue. "A profession once competitive when I first began my medical journey is now one of the least competitive fields to enter as students bear witness to the destruction of the profession," she said.

These firms also like to force doctors to spend inordinate amounts of time filling out useless forms on electronic medical records. In a study conducted by Wakefield Research, “An overwhelming 94% of respondents expressed that the absence of user-friendly insights negatively affects patient care, resulting in several harmful consequences,” including “delayed treatment initiation (53%), prolonged hospital stays (52%), and incorrect treatment plans (47%).”

These trends are clearly having major adverse effects on patients. After private equity acquisition, medical centers have exhibited an increase in hospital-acquired adverse events, despite a shift to a lower-risk case mix, as shown by a study of Medicare data. Admission at a private equity hospital was associated with a 25.4% greater risk of hospital-acquired conditions compared with treatment at a non-private equity hospital. Driving the difference were more falls and central line-associated bloodstream infections along with a doubling in surgical site infections, despite fewer central lines placed and a younger and less dually (Medicare/Medicaid) eligible population compared with the controls.

On the psychiatry side, over-medicating patients and under-training staff, as well as rampant falsification of patient records, plagued a North Carolina psychiatric hospital, according to an ongoing series of reports from North Carolina Health News. More than a dozen former employees of Brynn Marr Hospital in Jacksonville, North Carolina described a chaotic and violent environment dangerous for both patients and staff, according to the reports. Sexual violence and rape was a recurrent issue; police reportedly responded to 129 calls for alleged sexual assault and rape at the hospital from January 2019 to September 2023. Other hospitals owned by the same parent company as Brynn Marr, Universal Health Services, have reported similar issues.

 

Another example: Kohlberg Kravis Roberts is an investment company founded in 1976. Recently, KKR acquired hundreds of facilities for people with disabilities, which, under the new ownership, led to conditions in which residents were “consigned to live in squalor, denied basic medical care, or all but abandoned,” according to reportage from Buzzfeed.

Research also suggests  that PE acquisitions are associated with price increases in 8 of 10 specialties, and that these price increases are particularly high in metropolitan areas in which a single PE firm controls more than 30% of the market.”

 

 

 

Book Review: Breaking Free by Rachel Jeffs

In writing about groupthink, I’ve become aware of how amazingly powerful it is. The best illustration of that is people in cults – they are willing to destroy themselves when the group or its leader demands it. In the worst cults, members separate themselves from all other sources of information like books, media, or the internet that stand any chance of getting them to stop believing whatever their dear leader wants them to believe. Anyone can readily see how insane some of their ideas are, yet they all profess to believe them, well, religiously.

And they'll do almost anything they are told. Would you let a child of yours writhe in pain from a broken bone for a week because your leader didn't want them to be exposed to doctors except as a last resort? In the book reviewed here, that's one of the things that would happen.

In this book, the cult is the Fundamentalist Later Day Saints (FLDS) under Warren Jeffs. It was written by one of Warren Jeff’s older daughters, Rachel, who somehow managed to eventually escape and re-establish some sanity.

FLDS was a polygamous offshoot of the Jehovah’s Witnesses. Jeffs ended up with 78 wives and 53 children. Some of these wives had been previously married to Jeff’s own father before his father's death. Jeff described himself as God’s “prophet” who spoke directly with the supreme being. Despite demanding a puritanical ideology from his followers, he married girls as young as 14 or maybe even younger, and had them commit lesbian sex acts in front of him. He also molested at least two of his own prepubescent daughters, though he managed to get them to keep it a secret. He had six wives at the time.

Many of the rules he insisted his cult members follow were arbitrary, and were all "directed by God," who nonetheless changed His mind from time to time. Jeffs demanded strict obedience and hard work from everyone. Males often did not get paid for their work. And yet everyone almost always followed his instructions to the letter, no matter how crazy they became. Jeff would then offer them “blessings” from the “Heavenly Father.”

Men and women who hardly knew one another were assigned marriages. The “sister wives” — some of whom actually were real sisters and half-sisters — were supposed to get along and not be jealous of one another. But of course they couldn't help themselves.  Again, when it came to actual behavior, they always did what they were told to do. Husbands would often play one of them off against the others by showing favoritism as to which of them he would spend the night with.

Even though Rachel finally managed to escape and start to think for herself, in the book she still seems to indicate that many times she still fears she that is displeasing God.  In the book, this thought  seemed mixed with the horror of never seeing many of her family members ever again, which I think is the real fear. Her five children are never going to be able to see their father, who is still in the cult, ever again.

You can sense that all along she sort of knew her father couldn’t really be talking to God, yet still told herself he was and that therefore her soul was in danger. She knew all too well what happened to members who left or were thrown out of the group, but often thought the source of her conflicted ideas was her own sinfulness. 

It took her father telling others that God had told him that she had engaged in behavior that she knew she had not done. God, after all, wouldn’t lie like that. But as mentioned, at times she felt that a newly-found desire to leave her church was “the most wicked thing possible.” "Flirting with Damnation" is the title of one of the chapters in the book. At times, her real fear of being cut off almost seems to metamorphize into the religious one.

The cult was based primarily in a town called Short Creek, which straddles the border between Utah and Arizona. They had been pursued by the law there in the distant past for their polygamy, but had returned when the heat was off, so to speak. There was also an offshoot of the cult in British Columbia Canada. Young girls were often trafficked from one of these locations to another, often by their own fathers, so the men could marry them.

The cult had been left alone by the government for about 50 years, but in 2003 the state of Utah started to arrest and prosecute cult members for both underage sex and polygamy. Warren Jeffs knew he would be a target, so he started establishing colonies in which to hide in other states. As he moved around, and especially later after he was arrested and given a life sentence, he started to issue more and more strange instructions from God and “corrections” for certain cult members. From jail. More and more normal activities were said to be forbidden – having fun was almost illegal.

Everyone continued to follow him as he issued “corrections” to those who he deemed “unworthy.” They did so after his corrections became more and more heinous. He would send some members, usually males but sometimes females, away. And their children could never see them again. Rachel had been prevented from attending her own mother’s funeral. He moved people from one of his “refuges” to another, and sometimes punished them by putting them with a kind of solitary confinement, with very little food, for a month or two. There were many more horrible pronouncements I won’t describe here.

The level of willful self-destructiveness of people in a cult such as this is almost beyond comprehension. I finished the book wanting to hear more about how she handled the conflicted feelings she surely had after she left and was separated from everything she knew growing up.