Private equity in health care shown to harm patients, degrade care and drive hospital closures.

There is a legitimate reason for insurance companies to involve themselves in the healthcare market, and that is that many, if not most, patients don't have the cash available to pay for all of their necessary medical services. Healthcare services are expensive, for a lot of complex reasons, but one reason is that healthcare providers can be greedy, too. Many healthcare providers are also for-profit companies, and they want to maximize their profits as much as possible, also.

Enter health insurance, which spreads those costs over a large base of people, thus making healthcare services more affordable. Health insurance sucks, but without it, very few people would be able to afford anything other than relatively basic care. That is unless you happen to have tens, if not hundreds of thousands of dollars laying around.

So we have healthcare providers, equipment manufacturers and suppliers and pharmaceutical companies all trying to maximize their profits, and then health insurance companies as well, and it's a recipe for absolutely exploding healthcare prices.

The thing is, healthcare is always going to be relatively expensive. Doctors and nurses are skilled workers, who spend a lot of money getting an education, so they deserve to get paid. Medical equipment and supplies aren't necessarily cheap to make, neither are pharmaceuticals. Providing quality healthcare is just always going to have certain costs associated with it.

Profit, however, is not a necessary component to this. Adding to the price of all of these things to generate a surplus that goes to owners and investors is just unnecessary. So, profit should be eliminated from healthcare, full stop. No more for-profit hospitals, clinics, etc. That will help, but only so much. Even without owner/investor profit, healthcare would still be too expensive for many people. So, we absolutely need to spread those costs out, but not among the customers of many different private health insurance companies, but among the entire population of the nation.

Healthcare providers must be not-for-profit (but still regulated, because executives at not-for-profit companies can still be greedy assholes, and need to be kept in check), and there must be a single, national health insurance provider that everyone is required to pay into, through a progressive tax system.

From the report, the two firms singled out for special scrutiny are:

• Apollo-Owned Lifepoint Health and Ottumwa Regional Health Center (ORHC)

“ORHC’s private equity-owned operators failed to fulfill seven promises—including legally binding ones—made to ORHC when it was first acquired by a private equity-owned operator in 2010.”

• Leonard Green & Partners (LGP) and Prospect Medical Holdings (PMH)

“Despite gross financial and operational mismanagement of its hospitals, LGP took home $424 million of the $645 million that PMH paid out in dividends and preferred stock redemption during LGP’s majority ownership—in addition to over $13 million in fees—that left PMH in severe financial distress.”

So the usual ‘commit murder but it doesn’t count because it was done by paperwork’.

There's this old right-libertarian meme that goes something like this:

Me: I have apples
Friend: I would like to buy your apples
Government: We need to be part of this transaction

Somehow, they never connect insurance companies doing the same to healthcare.

I have yet to discover any way in which for profit investments in health care provide better results.

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