Effects of Private Equity
Also: Improving emergency care in rural America; violence at work; and valuable contributions by an NP & PA
Top of the week
Is private equity good for your job?
In 2019 private equity set a record for buyout volume in America. In the post pandemic era we are seeing more private equity in healthcare, but what is the attraction? The attraction is an increasing number of chronic illness patients and increasing number of older patients. Let me be clear; the attraction is not to improve the quality of care for those patients. Let’s glance at the footprint of PE in healthcare. From 2000-2018, valuation of PE deals in health care blew up from $5 billion to $100 billion!
The consolidation of power in healthcare by PE is causing increasing concern. Among the concern is the business model of taking on gargantuan loans to finance the buying and selling of contract management groups in order to turn a profit. When this happens, don’t expect patients, nor providers to win. A recent report found that patient costs were higher when PE is involved in healthcare. It is no secret that PE firms’ number one objective is to make the most money for their investors; but where in the list of priorities does that place the patient?
PE looks to control cost. Your salary is a cost item. Adding more provider coverage in your ED is a cost item. Don’t expect long term investments in either of these. When PE backed CMGs dominate a considerable market share, providers have less choices of employers. Less choices leads to limits in competitive wages. Once providers feel they have no choice but to accept and maintain employment they otherwise would not select, resentment builds, and provider burnout becomes more likely.
The buying and selling of contract management groups financed by large loans increases the risk of these PE owned groups going bankrupt. When this happens, lots of good providers are thrust into panic and stress regarding their job stability and pay. It also threatens the affected emergency departments’ ability to provide full, uninterrupted care.
The buying and selling of contract management groups is not too dissimilar from flipping houses. You want to buy low, invest minimal capital, and sell it for a profit. However, even when you sell a house, it has to meet certain building codes to ensure that a minimal standard of safety and quality for the consumer is met. Is patient safety and quality care being safeguarded when PE buys & sells CMG’s?
Emergency Medicine
Restoring emergency care
In 2019, the only ED servicing the small town of Jamestown, TN closed its doors. This has not been uncommon in TN. Rural areas of the state led the country with the most rural hospital closures.
In July of this year, the University of Tennessee Medical Center opened a free-standing ED in Jamestown. The 2000 residents of this town no longer have to travel over 36 miles for emergency medicine care.
Rescue to the rural areas
Check out this quick read about a trauma surgeon coordinating efforts to improve trauma care for rural residents. Currently, some rural trauma patients have to travel over an hour by helicopter to reach the closest trauma center. Improving triage processes can minimize unnecessary transport delays.
Emergency in the air
Some of you may be very familiar with available capabilities for in-flight emergencies. For those of you who are not, check out this recent article that talks about some of the options out there. If you think you’ll never be called upon to assist an in-flight emergency, think twice and be prepared.
Hospitals, health systems, and more
Violence in the workplace doesn’t seem to be going away anytime soon. A recent study demonstrated that the most violent workplace injuries take place in the healthcare industry. Recent shootings in hospitals have prompted much discussion about implementing measures to decrease the risk of further violent episodes. Add this problem to the list of reasons why healthcare workers are leaving/ considering leaving the workforce.
The Good Stuff
Read about impressive PA, Nina Partin Godsey from Texas. She is a Transplant PA at UTHealth. Nina is a great example of the diversity of talent that PAs can offer in healthcare. Way, to go, Nina!
Improving patient access to care is a top benefit that NPs can offer to the healthcare market. Many times, they go to places nobody else will; and more patients receive care because of them. Canada has been increasing NP presence in their market to address physician shortages. Check out this story about a new NP-led clinic in an area that has struggled to recruit physicians.
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