Major concerns over soaring private equity investment in the healthcare sector
They don't care about patients, only profits...
Continuing the story…
As I continue to collaborate with Daniel O’Connor, CEO of TrialSite News, on investment in pharma and the healthcare sector, some disturbing finding are popping up. This article below explains just one:
S O A R I N G P R I V A T E E Q U I T Y I N V E S T M E N T I N
T H E H E A L T H C A R E S E C T O R
These are the opening paragraphs in the Introduction:
The explosion in private equity investments in healthcare is a threat to both the structure and the goals of our healthcare system. Our healthcare system is organized on a private for-profit and non-profit basis, with a professional, cultural, and legal foundation that places the well-being of patients ahead of the financial interests of the providers and organizations that compose it. There is reason for grave concern that private equity investment could tear this foundation apart.
Private equity investing is characterized by an outsized appetite for risk, a relentless drive to consolidate business, and a singular focus on short-term revenue generation. As the name implies, private equity investing is, for the most part, private. The lack of transparency surrounding private equity investment is deeply concerning; scrutiny to protect the health and safety of populations should be present but is largely lacking. Private equity is a force that is changing how our healthcare system functions, and these changes are happening under the radar.
What we are able to discern about the impact of private equity on healthcare is deeply troubling. Though there may be instances where private equity firms produce value for a health system, hard evidence of these benefits is hard to come by. What is apparent from the anecdotes and studies on private equity in healthcare, so far, is that private equity business practices have caused significant harm to individual healthcare companies, to patients, and to markets, and that there are strong reasons to suspect that additional transparency and further study will reveal deeper, more serious, and growing problems. The American Medical Association has noted that private equity limits the autonomy of doctors—interfering with doctor-patient relationships—the core of our healthcare system.
What you need to know also, is that one of the early private equity investors in life sciences is a company named