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Apparently private equity is buying up small hospitals in LA
Posted on 3/18/24 at 11:14 am
Posted on 3/18/24 at 11:14 am
LINK
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.
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???
quote:
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.
quote:
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.
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.
quote:
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.
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???
quote:
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.
29
Posted on 3/18/24 at 11:18 am to LSUFanHouston
This will NOT end well
Posted on 3/18/24 at 11:21 am to LSUFanHouston
Not new. Most speciality centers are owned by PE
Posted on 3/18/24 at 11:37 am to LSUFanHouston
PE thinks they can squeeze a return out of rural hospitals….which has been proven time and again to be a fools errand.
Posted on 3/18/24 at 11:40 am to LSUFanHouston
I do a lot of work for a set of companies that own a bunch of small rural hospitals in the south….when run correctly , they can be profitable and sustainable for the community but it takes a lot of capital to get them up to speed with modern medicine.. the successful models seem to revolve around operations, management and real estate in separate entities working together
Posted on 3/18/24 at 11:40 am to LSUFanHouston
And we thought Ochsner was bad
Posted on 3/18/24 at 11:49 am to LSUFanHouston
1) glenwood isn’t particularly small
2) steward is terrible. They are know for this
3) PE backed entities are also buying up physician groups with disastrous outcomes by enticing 60 yo + doctors with a buyout. Then lowering salaries to the future docs and overworking them.
4) idk what happens to glenwood. Some of the articles state that people won’t do business with them anymore cause they won’t pay suppliers
2) steward is terrible. They are know for this
3) PE backed entities are also buying up physician groups with disastrous outcomes by enticing 60 yo + doctors with a buyout. Then lowering salaries to the future docs and overworking them.
4) idk what happens to glenwood. Some of the articles state that people won’t do business with them anymore cause they won’t pay suppliers
Posted on 3/18/24 at 12:02 pm to LSUFanHouston
They have been doing the same thing to the vet industry for over the last decade.
Posted on 3/18/24 at 12:18 pm to LSUFanHouston
quote:
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.
Just go ahead and nationalize it, commie.
Posted on 3/18/24 at 12:26 pm to LSUFanHouston
You’re forgetting the good news- at least it can’t be acquired by a group of physicians.
Posted on 3/18/24 at 12:31 pm to LSUFanHouston
quote:
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 is essentially what happened in the newspaper and radio business.
Private equity companies come in and start buying up small newspapers like the New York Time Group and consolidated management into Gatehouse Media. They then sold off the assets of buildings, offices, and even printing presses. They continued to purchase more newspapers and kept trimming staff and content after each merger and acquisition. Eventually they grew so large that they purchased Gannett and took the name.
On the radio side, Clear Channel was the king up buying up radio stations in several markets and consolidating operations first into stations groups and now almost central casting from a larger city with a small presence at the studio for sales and the few on air talent left.
This post was edited on 3/18/24 at 12:32 pm
Posted on 3/18/24 at 12:47 pm to LSUFanHouston
quote:
private equity is buying up small hospitals in LA
They're the only ones willing to take a shot at a 3rd world economy in a state with a poor and shrinking population.
Posted on 3/18/24 at 12:57 pm to LSUFanHouston
prioritizing Shareholders over employees/customers is always a recipe for disaster. seeing it where I work.
75% of the employees got no raises, and the rest got a 1% or less raise - but the shareholders got theirs.
75% of the employees got no raises, and the rest got a 1% or less raise - but the shareholders got theirs.
Posted on 3/18/24 at 1:00 pm to LSUFanHouston
No one wants to hear this, but we would be better off with government owned health care than PE owned healthcare.
Posted on 3/18/24 at 1:02 pm to LSUFanHouston
Size wise, Glennwood isn’t exactly small, but the I-20 healthcare market outside of Shreveport has been struggling for a while.
Pretty much all the small hospitals up the western part of LA have been dumped by the big corporate “brands” and are owned by shady for profit entities.
Look up Allegiance Health Management out of Shreveport. Everyone I’ve known that’s been a clinician at one of their facilities has run away as quickly as they could. A number of lawsuits against them as well too.
Pretty much all the small hospitals up the western part of LA have been dumped by the big corporate “brands” and are owned by shady for profit entities.
Look up Allegiance Health Management out of Shreveport. Everyone I’ve known that’s been a clinician at one of their facilities has run away as quickly as they could. A number of lawsuits against them as well too.
Posted on 3/18/24 at 1:04 pm to LSUFanHouston
As a health care professional, what is happening to healthcare as larger corporations take over is frightening for patient safety.
I live it every day as the CEO and CFO limit my staff to dangerous levels and then throw the remaining staff under the bus when something goes wrong with patient care.
It is dangerous to be a hospitalized patient in today’s world.
And then you have insurance companies like Humana buying up home care companies and pharmacies (CVS) and driving the small town pharmacies and agencies who actually care about their patients out of business. This way they can dictate what is covered and at what price.
I live it every day as the CEO and CFO limit my staff to dangerous levels and then throw the remaining staff under the bus when something goes wrong with patient care.
It is dangerous to be a hospitalized patient in today’s world.
And then you have insurance companies like Humana buying up home care companies and pharmacies (CVS) and driving the small town pharmacies and agencies who actually care about their patients out of business. This way they can dictate what is covered and at what price.
Posted on 3/18/24 at 1:49 pm to LSUFanHouston
quote:
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.
The medical industry is just another for-profit arm of our savagely capitalistic society that bleeds the consumer until they die. Produce unhealthy food for the masses that cause cancer, diabetes and heart disease. Deliver sub-par healthcare at a ridiculously inflated rate because they are charging your insurance that you're required to have. When they don't want to pay the stupid bill you get to pick up the tab. On top of that, as an added bonus these medical experts convince you to use some medicine that gives them incentives but gives you unintended side effects instead.
Posted on 3/18/24 at 3:25 pm to LSUFanHouston
The other side of the equation in the push towards socialized medicine.
Posted on 3/18/24 at 3:37 pm to LSUFanHouston
Thoughts and prayers to the people in those regions. They are going to slash the frick out of services and jack up prices 100% guaranteed.
Posted on 3/18/24 at 3:42 pm to LSUFanHouston
Private equity in medicine is a cancer that harms patients. I don’t believe in big daddy government solving all our problems, but this seems like something that should be fixed with legislation. PE squeezes every last penny out of these communities, their hospitals, and their physicians/nurses/staff, often leaving a shell of what used to be a functioning system.
It’s all good though, Obamacare made it so that doctors can’t own hospitals but private equity is totally fine.
Imagine if lawyers couldn’t own law firms or mechanics couldn’t own a shop. The whole thing is insane and completely demoralizing to medical staff and the patients they serve.
It’s all good though, Obamacare made it so that doctors can’t own hospitals but private equity is totally fine.
Imagine if lawyers couldn’t own law firms or mechanics couldn’t own a shop. The whole thing is insane and completely demoralizing to medical staff and the patients they serve.
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