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?
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.
> Because we have governments anemic to running anything or regulating any business.
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).
> 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.
Wiki tells me that the EPA was created by Richard Nixon in 1970. Also, it matters little when a regulatory body was created. It matters much more how it changes over time -- it is continously adapting to changes in our society and economy. For example, after the 2008 global financial crisis, securites markets regulators changes significantly to strengthen the financial system.
> Since roughly Reagan, the US has been either fully dismantling, defunding, or privatizing these institutions.
Clinton, Obama, and Biden were doing this? If so, please provide examples.
> Clinton, Obama, and Biden were doing this? If so, please provide examples.
Yup. Primarily on the 3rd prong but, especially under Clinton, there was also significant defunding that went one. "The era of big government is over".
Clinton did welfare reform, which added much stricter means testing and work requirements to welfare. The "reinventing government" program was literally a hack and slash on government agencies not unlike DOGE. The student loan reform reduced subsidies for students. He signed in the crime bill which enabled the building of private prisons and ramped up the US incarceration rates. And he created Medicare part C which created a route to send government funds to private insurers.
Obama's signature bill, the ACA, was a giant handout to insurance companies in pretty much every way. By trying to force people into buying insurance and also subsidizing insurance purchases, it was a major gift to health insurers. Even the Medicaid expansion mostly resulted in private insurers getting more wealthy as most states implement Medicaid via a private insurance contractor. After the first midterm Obama got very little done mainly due to the republican's continuing the Newt Gingrich "we oppose everything you support" strategy and the filibuster.
Biden was mostly business as usual, however both the infrastructure bill and the chips act can't be seen as anything other than just massive giveaways to private industry. The build back better act would have been the same had it passed.
> 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.
The President's statements, and even unspoken thoughts, have the full force of law. This President, anyway-- I think the Supreme Court has a special criterion they use to determine whether Unitary Executive Theory should apply to a particular administration.
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.
> 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
It's a line that tends to be mainly parroted by... the US. Quelle fucking surprise.
Free market ideologues are too dumb to understand local minima.
An ideal free market is a global minima (in theory). It's the best.
A non-ideal free market (heavily subsidised and regulated) might be close (in parameter space) to a global minima, but might be highly suboptimal compared to a local minima.
It's not even that. Free markets by themselves (as implemented thus far) DO NOT ACCOUNT FOR EXTERNALITIES.
I have yet to see reasonable fix to the tragedy of the commons in a free market situation, and that's one of the most basic things one is fucking introduced to when studying economics and game theory.
Anybody who thinks health care is best served solely privately should have to pay to be diagnosed for something; either that or they've been failed in their privately funded education.
In the past I have read some libertarian literature that suggested the answer to the tragedy of the commons was that there should be no commons. Everything should be privately owned. How that would actually work in practice is way beyond my tiny brain.
Former libertarian here. The issue with libertarianism is that it does not explain the state of the world. The world is inherently unregulated. If libertarianism was superior it would have outcompeted other systems and it would have been the dominant system right now.
Historic explanations are even more problematic. How does libertarianism explain nomadic cultures or rice growing cultures (that tend to be highly collectivist)?
It doesn't matter if it works in practice - it's religion, so it doesn't have to be true. We sent rockets up into space and there wasn't a giant man there watching us, but people still believe God exists. We tried living in a free market and everything turned to shit, but people still believe in libertarianism.
I think the theory is that if people owned the forest, the rivers, etc, they would have an incentive to take care of them for the long term. As we've seen with how companies have had all the value sucked out of them by private equity, leaving nothing but husks, I think this is a pipe dream.
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.
it’s that first paragraph which is really the bugaboo. In an ideal world that first paragraph is 100% true. In reality, what you get is the government getting its own people on the inside, raking in tons of contract money and doing very little for that, then squeeze the services on the inside to win political points from their constituents by drumming up hatred for the system in which they work. While they take in "campaign contributions" from private entities who benefit from people falling out of the system or being fed up with it.
so I agree with you in theory, but in practice, there was a whole host of other issues that would need to be dealt with somehow. I don’t know that more bureaucracy is the solution, but I would like to think it can be handled.
Actual competition and monopoly breaking/preventing.
"Free" markets tend to have transparent pricing : US healthcare does not.
"Free" markets tend to have large numbers of independent players that compete with each other : This is disappearing in the US market.
We have the worst of both systems currently. It's not ran by the government to control costs to the end user. And it's ran by a few monopolistic insurance/medical companies to reap as much profit as possible.
Canadian healthcare is horrible, pretty sure public healthcare in the UK is also very bad. It’s not a given that somehow switching to public healthcare will make the US like Finland, Canada is much more likely.
Yes, when the government politicians hate public healthcare they can successfully sabotage it. That just means we need to structure it in a way that they can't. The examples given were all successful in their missions in the past before they were actively targeted.
It's all about the execution - UK NHS public healthcare was once easily the envy of the world (I'm from Australia, not the UK) and then it suffered decades of being white anted by Conservatives.
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
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.
Ukraine an interesting moment with the recent (as in less than 10 years ago) health reform. The change was not in the ownership regime, but in funding (preallicated fixed amount vs post payment for itemised coded services).
Once the incetives got changed, a lot of doctors opened up their own practices as PE. The government still foots the bill, but the corrupt middleman of the local variety got cut from the flow
The hospital has 100 beds, 30 in personnel and some amount of equipment to maintain, repairs to make, etc. They get funding from the ministry based on that. Then the head of the hospital pockets some of the allocated money on repairs and gets some percentage off bribes that doctors get from patients. If nobody ever visits the hospital, no surgeries are performed and no x-rays are done, they still have the same funding. People mostly can only go the hospital in the locality where they have their registered address (which you don't get if you live in the privat rental, but it's a different problem), unless they pay a bribe (see above).
After: the hospital is still government (or city) owned, but it has to generate revenue by proding actual services. Since health is a basic constitional right, the government still pays for most of the stuff, but only after they get the itemized bill of services and materials provided. Itimized services and materials have fixed prices set by the government too. Government or a city can still give the hospital a subsidy if they want for some capital heavy stuff, but they then see how good it's utilized.
Now the best part -- if you are a doctor and head of your hospital is a cunt, who still does the habitual stuff, you can get from your ass and open your own one-person practice, sign a contract with the government and they will pay the same amount to your directly. The patients can choose freely where they get the service and will not pay for it anyway. In practice it also means not having to pay bribes to actually have it provided.
You can think of it as a government operating an insurance company that is funded directly by the taxpayers and then dealing with health providers on a regulated, but open, market.
What is the appropriate level of safety? Safety is a spectrum, not a binary condition. Privately owned commercial airlines operating under strict government regulation seem to be pretty safe.
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?
> 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.
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.
Oh, trust me, I would absolutely love for a lot more of the US to be socialized (certainly healthcare, housing, and transportation.)
Unfortunately that is virtually impossible in the current political climate, so I didn't include it.
What I was trying to say is that, as it stands, PE is the end of an entity's life. Once it's been strip-mined for all value, of course nobody wants it.
> that is virtually impossible in the current political climate
We probably need a Constitutional amendment codifying independent agencies before it can happen. We don’t need the President denying protesters medical treatment because he needs to distract from his pediphilia.
The government-owned things still suck too, they just give sweetheart contracts to whoever greases the right palms even though they suck. The money still flows to bad people, no matter what. Having it be tax money in the first place just increases the possible money available to be stolen, since government budgets can in practice only go up, plus the feds can print money.
> 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.)
If you change rules to make the PE business model unprofitable, since it's in many ways toxic to society, you can result in them then needing to sell, for much less than they'd like most likely, or adapt and become less toxic.
> you can result in them then needing to sell, for much less than they'd like most likely
I’m imagining harder. Forced divestiture. Good amount of the hospitals and nursing homes would be bought of out bankruptcy.
But they still need to be bought and funded. And I think nobody wants to have a conversation about how much that costs and who winds up paying for it, particularly with many of PE’s hospitals being in rural America.
> 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.
The average effective tax rate stayed flat from 1945-2015, but the effective tax rate for the 0.1% and 1% fell during that time period. Bottoming out around the Bush years (although the graph only goes to 2015 so another source is needed to see how the Trump tax breaks have played out). The top for the 0.1% was almost 50% and the bottom was almost 20%. Now those almosts are working in the opposite directions so you should look at the graphs.
Now the 1% is paying more of the overall taxes, about 40%, but that number is also skewed (and can be misleading) by the absolute massive disparity between what the top and bottom make now. Plus of course reporting and tax compliance has changed a bit, plus a whole host of other confounding factors that this 40% statistic subsumes, but it's worth mentioning because it's always brought up in these discussions.
Yes, and the rest of the article discussed how they actually have revisited some of their numbers and links to their reports where you can read about their methodology and decide if it's comprehensive enough.
To quote the article: "Debates over measuring effective tax rates have been lively because measuring taxes and incomes is complex and involves judgement calls (and the political stakes are high.) We applied a simple and replicable method to a single, publicly available source of data to estimate the effective tax rates of high-income taxpayers that avoids making assumptions about grey areas like unrealized capital gains and corporate tax burdens."
> 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?
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
A 1 month average age difference is not medically significant.
They had more bloodstream infections yep. Surgical infections was NOT statistically significant. And again, mortality went down!!
The “dumping cases” thing is incredibly suspicious.
So they’re so motivated by money that they … don’t keep patients who would spend a lot?
On top of that, the 30 day mortality doesn’t show an increase, which is what you’d see if they dumped deaths onto other hospitals.
Medicare reimburses by DRG, which is a payment for the average cost patients with that diagnosis and comorbidities have.
Usually those hospitals send the patients they expect to become to cost more than the DRG Reimbursement (Complications, too old, too many comorbidities) off to public hospitals. At least that's how it works in Germany.
At the same time, they are very aggressive with upcoding their diagnoses to get more reimbursement.
[1] https://jamanetwork.com/journals/jama/fullarticle/2813379
[2] https://www.nber.org/papers/w28474