Ethically Challenged: Private Equity Storms US Health Care

by Laura Katz Olson

Overview

Revealing the dark truth about the impact of predatory private equity firms on American health care.

Won Gold from the Axiom Book Award in the Category of Business Ethics, the Benjamin Franklin Awards by the Independent Book Publishers Association and the North American Book Award in the Catergory of Business Finance, Finalist of the American Book Fest Best Book Social Change and Current Events by the American Book Fest

Private equity (PE) firms pervade all aspects of our modern lives. Unlike other corporations, which generally manufacture products or provide services, they leverage considerable debt and other people's money to buy and sell businesses with the sole aim of earning supersized profits in the shortest time possible. With a voracious appetite and trillions of dollars at its disposal, the private equity industry is now buying everything from your opioid treatment center to that helicopter that helps swoop you up from a car crash site. It may even control how and when you can get your kidney dialysis.

In Ethically Challenged, Laura Katz Olson describes how PE firms are gobbling up physician and dental practices; home care and hospice agencies; substance abuse, eating disorder, and autism services; urgent care facilities; and emergency medical transportation. With a sharp eye on cost and quality of care, Olson investigates the PE industry's impact on these essential services. She explains how PE firms pile up massive debt on their investment targets and how they bleed these enterprises with assorted fees and dividends for themselves. Throughout, she argues that public pension funds, which provide the preponderance of equity for PE buyouts, tend to ignore the pesky fact that their money may be undermining the very health care system their workers and retirees rely on.

Weaving together insights from interviews with business owners and experts, newspaper articles, purchased data sets, and industry publications, Olson offers a unique perspective and appreciation of the significance of PE investments in health care. The first book to comprehensively address private equity and health care, Ethically Challenged raises the curtain on an industry notorious for its secrecy, exposing the nefarious side of its maneuvers.

Product Details

ISBN-13:	9781421442853
Publisher:	Johns Hopkins University Press
Publication date:	03/08/2022
Pages:	440
Sales rank:	508,233
Product dimensions:	6.12(w) x 9.25(h) x 1.38(d)
Age Range:	18 Years

About the Author

Laura Katz Olson (BETHLEHEM, PA) is a distinguished professor of political science at Lehigh University. She is the author of Elder Care Journey: A View from the Front Lines and The Politics of Medicaid.

Table of Contents

Acknowledgments
Introduction. Hiding in Plain Sight
Chapter 1. Who Even Are They? Private Equity from Soup to Nuts
Chapter 2. The Emergence of the Alternative Asset Class
Chapter 3. Consolidating Health Care
Chapter 4. It's between Me and My Doctor?
Chapter 5. Drilling for Gold: Corralling Dentists
Chapter 6. Frail Elderly and Children: Homecare and Hospice
Chapter 7. Public Crisis, Private Gain: Substance Abuse and Eating Disorders
Chapter 8. Capitalizing on Children with Autism Spectrum Disorders
Chapter 9. Hijacking an Industry: Medical Ambulances and Emergency Air Transport
Conclusion. Infiltrating Our Health Care System
Appendix. Selected Private Equity Firms Buying Health Care Businesses
Abbreviations
Glossary
Notes
Bibliography
Index

Editorial Reviews

2022-07-28
Private equity firms are weakening America’s medical industry and hurting patients with their callous drive for profits, according to this sobering exposé.

Lehigh University political science professor Olson, who previously wrote about the industry in The Politics of Medicaid(2010), probes the takeover of much of the health care sector by private equity firms that buy companies with borrowed money and saddle them with enormous debt obligations; the PE owners then service these debts and wring profits out of their new companies by slashing costs, raising prices, and laying off workers, with an eye toward quickly selling the company again (often to another PE firm). Olson patiently unravels the labyrinthine dealmaking by which PE firms have bought hospitals, medical specialty practices, dialysis clinics, rehab centers, nursing homes, hospices, dental offices, and ambulance services, sometimes assembling them into giant health care monopolies. The results, she contends, have been dire. The pressures of debt and profit-seeking incentivize PE managers to cut budgets; shift care from highly trained doctors to lower-skilled, underpaid, and overworked nurses and physician assistants; skimp on supplies; lower standards while also performing unnecessary procedures; engage in upcoding; raise prices; and hound patients who can’t pay the resulting inflated bills. She uncovers many horror stories at PE–run facilities; for example, dermatology practices that misdiagnosed cancer as eczema, inadequately anesthetized kids strapped down for agonizing root canals on their baby teeth, autistic teens beaten and sexually assaulted, epidemics of billing fraud, and car-crash victims who get $60,000 bills for a flight of a few miles in a medevac chopper. Olson draws on press reports, regulatory filings, and her own interviews with health care workers to flesh out a detailed and troubling picture of private equity depredations. Her research is far-ranging and meticulous; she names names, crunches the numbers, and shows her receipts, conveying her findings in lucid prose lit with flashes of passion. Hers is a finely honed critique not just of malpractice and financial hubris, but of a dispiriting moral shabbiness that’s poisoned a field that should be idealistic and humane. Many readers will feel similarly outraged at the avarice she unearths here.

A disturbing, timely report on the deep corruption of health care by capitalism run amok.

Kirkus Reviews