Private Equity Is Taking Over!
I got an e-mail from the Alliance for Retired Americans today, and it was very disturbing. Private equity is making great in-roads into our healthcare system. We’re not talking about just insurance and drug companies: we are talking about medical practices and institutions, often running below regulatory notice by staying under a $101million purchase amount. They add up, though, and can create terrible outcomes.
Here’s a quote:
Private equity firms pool money from investors, ranging from wealthy people to college endowments and pension funds. They use that money to buy into businesses they hope to flip at a sizable profit, usually within three to seven years, by making them more efficient and lucrative.
Private equity has poured nearly $1 trillion into nearly 8,000 health care transactions during the past decade, according to PitchBook.
. . . .
In the health care sphere, private equity has tended to find legal ways to bill more for medical services: trimming services that don’t turn a profit, cutting staff, or employing personnel with less training to perform skilled jobs — actions that may put patients at risk, critics say.