C-Force: Indicators Facing Wrong Direction for the Health Care Industry

Chuck Norris on

As I reported a couple of weeks ago, a recent NBC News investigation revealed that regulatory filings and internal documents show that an estimated "40-plus percent" of the country's hospital emergency departments are now overseen by for-profit health care staffing companies owned by private equity firms. It is a developing trend that is raising questions and causing concern among medical professionals.

"Putting the profit motive in between the patient and the physician can lead to untoward consequences in terms of care," a worried Dr. Robert McNamara, chairman of emergency medicine at Temple University's Lewis Katz School of Medicine and chief medical officer of the American Academy of Emergency Medicine Physician Group, tells NBC. Now add private equity ownership of nursing homes and long-term care facilities as an additional area of unease.

Kaiser Health News reported that the Government Accountability Office is currently investigating the ownership of nursing homes, including by private equity firms. A report on their findings is expected in the fall. This is a sector well-known for being racked with nursing shortages, money problems, facility shutdowns and high COVID death rates. According to KHN's Victoria Knight, the House Ways and Means Oversight Subcommittee is now in the process of trying to better understand the consequences of private equity's involvement in health care and "the far-reaching impact" of bankruptcies or closures following private equity buyouts.

A February 2021 study from the National Bureau of Economic Research found that "going to a facility owned by a private equity firm increased the chance that a resident would die by 10%, compared with living in another type of facility," says Knight. The American Investment Council, an advocacy group for the private equity industry, has countered with studies that dispute such findings.

What's undisputed, says Robert Tyler Braun, an assistant professor of population health sciences at Cornell University, is "that private equity firms are buying nursing homes because they're likely to be profitable." Braun is the author of a November 2021 study that found that "residents of private equity-owned nursing homes were more likely to have emergency room visits or be hospitalized than residents of other for-profit homes," KHN reports. Both the Cornell study and the study from the National Bureau of Economic Research found that "Medicare's costs per resident were higher, meaning more taxpayer dollars were being spent in private equity facilities."

What's clear is this represents yet another sign that management of our health care system is a mess. And, as if we needed more proof, here comes a March report by Ricardo Alonso-Zaldivar of the Associated Press, warning that "when the end of the COVID-19 pandemic comes, it could create major disruptions" for our "cumbersome U.S. health care system."


Winding down, possibly as early as summer, will be a raft of temporary emergency measures tied to the coronavirus public health emergency first declared more than two years ago. Says the AP report, it "could force an estimated 15 million Medicaid recipients to find new sources of coverage, require congressional action to preserve broad telehealth access for Medicare enrollees, and scramble special COVID-19 rules and payment policies for hospitals, doctors and insurers." It does not "bode well for the complex U.S. health care system," says Alonso-Zaldivar.

"The nonpartisan Urban Institute think tank estimates that about 15 million people could lose Medicaid when the public health emergency ends, at a rate of at least 1 million per month," he writes. More people could wind up uninsured. Hospitals could take a major financial hit.

"This is an unprecedented situation ... The uncertainty is real," says Matthew Buettgens, lead researcher on the Urban Institute study.

This is all playing out at a time when our need for health care, and especially mental health services, may have never been greater - especially for a most vulnerable population: young people.


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