Private equity (PE) firms are steadily acquiring businesses and agencies providing autism, eating disorders, and substance abuse services; physician practices; home care and hospice companies; medical transportation (helicopters and ambulances); and urgent care facilities. With an eye on cost and quality of care, I investigate the PE industry’s impact on these essential services. I point out that its tool kit relies on piling up massive debt on its investment targets and requiring them to pay it off. PE firms also bleed these enterprises with assorted fees and dividends for their own financial benefit.
My research provides a much-needed critique of the role PE plays in our health care delivery system. It raises the curtain on an industry notorious for its secrecy, exposing the dark side of its maneuvers. This is especially important because of the secretive nature of PE firms, which do not have to provide vital data about their financial activities to the SEC or anywhere else. My work looks at the potential consequences of leveraged buyouts on the nation’s vital health services. For example, I investigate the dynamics that enable financial engineering and other predatory PE tactics, and the consequences for healthcare businesses, clients, taxpayers, front line workers and society at large. The role of public sector pension funds, which provide the preponderance of equity for PE buyouts, are also explored—pension board trustees, seeking high returns, tend to ignore the inconvenient fact that their money may be undermining the very health care system their workers and retirees rely on. My studies of PE and healthcare also address such issues as government policies, lobbying and campaign contributions, a revolving door between political leaders and PE executives, monopoly control over services, and access to and quality of health care.
Currently, I am building on this research to probe the history, problems and consequences of American nursing homes, including those related to private equity (PE) investments. The nursing home industry is not only complex but also is experiencing a rapid increase in PE investments. I am investigating escalating costs for taxpayers and clients, access to services, the growth in nursing home bankruptcies, and quality of care. For the aged and their families, low quality of care—and often dangerous conditions—are serious concerns. I am also tracing the history of specific companies, their complicated ownership structure, and the impact of PE purchases on communities and older people in need of long-term care.