Apparently private equity is buying up small hospitals in LA

LINK

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The financial crisis plaguing a national for-profit health care chain has hit patients in northeast Louisiana, where one of the company's hospitals has faced recurrent supply and staffing shortages and is restricted to one-third its capacity as part of an agreement with the Louisiana Department of Health.

Glenwood Regional Medical Center, a 278-bed hospital in West Monroe, is one of 33 hospitals owned by Steward Health Care, a private-equity-backed system based in Dallas with a large presence in Massachusetts. Glenwood is a key health care player in northeast Louisiana, serving not just western Ouachita Parish but also patients from numerous rural parishes in the region.

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Steward, which has 30,000 employees, has been under fire in Massachusetts for the financial mismanagement of its hospitals while continuing to pay dividends to stockholders and provide generous benefits to its executives, according to reporting from The Boston Globe.

The implosion has brought into question the stability of private equity health care deals. A study published in JAMA last year found that serious medical errors, including those that led to surgical infections and bed sores, rose 25% in the three years after a private equity fund bought a hospital.

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The goal of private equity is as follows:
1) Buy a business and load it up with debt
2) Take a ton of cash out
3) Trim expeneses to the absolute bone, and usually beyond
4) Starve the business of resources / spending as much as possible, but not so much as to cause it to shut down, so they can flip it in a few years and make a ton of money and pass it on to the next group, or
5) If they go too deep and end up putting it out of business, just sell off the assets and get the remaining cash out that way.

That's fine with a manufacturing company or a retail operation. But to do that with a hospital seems like a really, really, really bad idea for our society.

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Louisiana has the second-highest number of private-equity-backed hospitals compared to other states, according to the Private Equity Stakeholder Project. There are 27 such hospitals in the state.

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We have the unhealthiest population of any state out there. I guess that makes us attractive to private equity. Who said we weren't attractive to businesses???

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Even before inspectors stepped in, doctors at Glenwood were worried. Last April, 10 physicians expressed ”deep concern” over a lack of supplies and staff in a letter to the hospital’s governing body, according to the reports.

At times, medical personnel couldn’t perform certain basic blood and urine lab work or test on site for common infections like COVID, staph or strep, according to the inspection reports. The documents also alleged that vendors hadn’t been paid.

Then there were the documented problems with staffing.

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