Are you a fan of “The Resident”?  This is the Fox TV show (acquired from Showtime in 2018), starring Matt Czurchy, Emily VanCamp, and Bruce Greenwood.

Not that it’s a uniformly great show, but it clearly demonstrates what I consider to be a negative trend in American Health Care.  A nameless (OK, Red Rock) financial firm controls one of the elite hospitals in Atlanta.  Where the bottom line (and a few illegal shenanigans) are the routine considerations, over the need for quality patient care.

Over the past decade or so, that’s what has been happening in real life.  Blackstone, Apollo Global Management, The Carlyle Group, KKR, and Warburg Pincus (private equity firms that typically acquire  health care entities, suck up the available cash, load the entities up with debt [owed directly to the private equity firm], and then watch the entities struggle to survive. You can read the tea leaves by examining what happened to Sears, Chrysler, and a bunch of other nameplate companies similarly ‘acquired’  over the past few decades.

This does not bode well for America, allowing private equity firms to raid the medical industry.  (To the tune of some $ 100 billion, I might add.)

It’s been quite a shift.  A century ago, hospitals were owned by non-profit entities or localities and America’s doctors had their own practices.  By, the late 1970’s,  a bunch of for-profit hospital firms arose (Healthcare Corporation of America, Tenet Healthcare, etc.), with a bunch of doctors still having private practices- but also opening up specialized clinics (X-ray, CAT scan, gastroenterology, dialysis centers, among others) to augment their financial position.

Now, those firms and hospitals are being sucked up by private equity. In health care, the drive for profits clearly comes at the expense of patient care, which leaves you and me- the users of the health care establishments at risk.  (Remember – if you are old enough- what those ‘managed care’ insurance companies did to patient health in the 1980s and 1990s.)

But, it’s not just medical care per se.  It’s the medical services themselves.  Imagine going to your long-term physician and being told you have some papers to sign.  Nothing important, just a few clarifying items.

I don’t know about you, but signing a form that stipulates any disagreements or problems with the practice are to be subject to “binding arbitration” sound pretty darned important to me. What that means is if, G-d forbid, a medical error is made (say, in treating a leg for necrotizing fasciitis caused by Klebsiella pneumoniae, the practice injures one’s ankle badly ambulation is difficult and there’s a chance of permanent pain), we would have no recourse to the courts or a jury trial.  Nope, just arbitration.  Which never awards damages for pain or suffering and is often way too pro-business.

(By the way, the Florida Supreme Court has ruled that this is an illegal practice- yet it’s still employed across the state.  Kind of like signing those non-compete clauses that the courts have ruled invalid- but if you sign them, they are enforceable.)  The additional problem is that arbitration is a private procedure- so we can’t figure out which practices are playing fast and loose with the rules and to avoid their providing us medical care, since adverse results are no longer public.

The driving force behind this nefarious concept, of course, is the costs of malpractice lawsuits and insurance.  By creating these arbitration clauses, the medical practice can forgo the purchase of malpractice insurance, saving hundreds of thousands of dollars (if not millions, for a very busy practice.)

Consider that 4000 women’s clinics are now owned by private equity.  Which is why births by C-section (Caesarian) have dropped from ¹/₃ of all instances to a very small fraction.  (It’s more expensive for patients and can involve higher risks- but so do the pregnancies that require the procedure.)  But, it’s not just women’s clinics and obstetrics that private equity is sucking up, it’s dermatology, gastroenterology, and similar clinical practices.

Yeah.  In the days of COVID, yet another reason to consider bypassing the local hospital or doc.  Which certainly does not improve our overall health.

We’ve come a long way since Dr. Welby provided us our health care.  Just not in the right direction

Share this: