Over the last decade or so, private equity firms — aka “vulture capital,” where investors borrow the money to buy a successful business, load that debt onto the business itself, strip it of all its assets, and then pay themselves kingly amounts of money from what’s left of the business to run the it into the ground, at which point they shoot it dead like a lamed race horse in an old-timey movie — have ruined or come close to ruining damn near everything good in this world. From the housing market to journalism (Vice, nearly everything besides us that used to be part of the Gawker network, all kinds of local journalism) to Sears to Toys ‘R’ Us to Red Lobster, which survived but not before we were all nearly in danger of living in a sad, tragic world without Cheddar Bay Biscuits.
Another thing private equity has been fucking with? Health care! This has resulted in the closure of “less profitable” departments (like psychiatric units, trauma centers, and maternity wards, because who needs those?) as well as entire hospitals. There have been staffing shortages as they’ve replaced nurses with less credentialed and less expensive workers, leading to serious medical complications and hospital-acquired infections (one study found a 25 percent increase in said infections) and all kinds of other disturbing results.
That is why so many of our faves in the Senate and Congress are banding together to put a stop to it.
On Wednesday, Senators Elizabeth Warren (D-Massachusetts), Ron Wyden (D-Oregon), and Jeff Merkley (D-Oregon), along with Representatives Val Hoyle (D-Oregon), Alexandria Ocasio-Cortez (D-New York), and Suhas Subramanyam (D-Virginia), introduced the Stop Corporate Takeovers of Physicians Act, in order to ban the corporate practice of medicine.
According to a press release, the bill
Bans the corporate practice of medicine by making it illegal for private equity funds, insurance companies, and other for-profit corporations to own or control medical practices;
Closes the “friendly physician” loophole that has allowed investor-backed corporations to evade state-level bans on the corporate practice of medicine and control medical practices through MSOs;
Prohibits an MSO from controlling a medical practice through a “friendly” or “captive” physician, or by taking over business, administrative, and clinical functions such as hiring and firing, work schedules, compensation, disbursement of revenue or setting of revenue targets, billing practices, contracting, and other services;
Ensures that physicians retain ultimate control of medical practices by requiring that physician owners are meaningfully engaged in providing medical care in the state in which their practice is located; and
Protects physician independence by prohibiting corporate interference with clinical decisions and banning restrictive contract terms, such as non-compete agreements, nondisclosure agreements, and non-disparagement agreements.
While many states have enacted their own bans, these companies “have exploited legal loopholes that allow them to circumvent these restrictions to the detriment of clinicians and patients.” A federal ban would change that. And not a moment too soon, because just in the last seven years, we have seen the percentage of doctors employed by corporate entities increase from 62 percent to 80 percent.
“Patients want to know that decisions about their health are being made by their doctors, not by Wall Street investors,” said Senator Warren. “If we’re going to lower costs and un-rig the health care system, we need to stop the corporate takeover of medicine.”
“Across the country, private equity firms and corporate conglomerates are buying up American physician offices. To increase shareholder profits, these entities often cut corners, leading to patients paying more for significantly worse care,” Rep. Alexandria Ocasio-Cortez explained. “I’m proud to co-lead the Stop Corporate Takeovers of Physicians Act to get Wall Street out of Americans’ doctors’ offices and ban predatory noncompete agreements for healthcare workers.”
The press release notes that the legislation, which is based on the laws governing these entities in Oregon, is also supported by Representatives Yassamin Ansari (D-Arizona.), Yvette Clarke (D-New York), Chris Deluzio (D-Pennsylvania), Maxine Dexter (D-Oregon), Maxwell Frost (D-Florida), Eleanor Holmes Norton (D-Washington DC.), and Rashida Tlaib (D-Michigan), and has been endorsed by a variety of medical groups, including “American Academy of Emergency Medicine, American Economic Liberties Project (AELP), Coalition for Patient Centered Care, Bull Moose Project, OrthoForum, Alliance of Independent Dentists, Private Equity Stakeholder Project, Center for Health and Democracy, Association for Independent Medicine, OnCARE Alliance, Families USA, Committee to Protect Health Care, and Social Security Works.” You will note the lack of Republican sponsors and supporters of this bill, as they do seem to love it when people get fucked by healthcare costs.
“States established prohibitions against the corporate practice of medicine a century ago for a simple reason: when corporations start making medical decisions instead of doctors, everyone loses. Care gets worse and more expensive for patients, working conditions get worse for doctors and their staff, and communities lose the unique benefits of high-quality, independent care,” said Joe Van Wye, policy director at Coalition for Patient-Centered Care. “We commend the sponsors of the Stop Corporate Takeovers of Physicians Act for introducing today’s legislation, which will enshrine our nation’s strongest and most effective protections against the corporate practice of medicine into federal law for the benefit of all Americans, and hope it is enacted quickly.”
This all started, you should know, with the dude who started the Kentucky Fried Chicken franchises.
No, not the Colonel — a guy named Jack C. Massey.
You see, back in 1964, Massey and a lawyer friend bought Kentucky Fried Chicken from Colonel Sanders and turned it into a well-oiled franchise machine, with each restaurant looking and running the same. And, following his success with KFC, Massey was like “Okay, but what if I did the same thing … but with hospitals.”
Yeah.
So he bought up a fuckton of hospitals and turned them into the profit machine known as the Hospital Corporation of America, which still exists today even though he is long dead. This was the beginning of the corporatization of hospitals, and while it did lead to some good things (more organized administration and billing for example), it helped create the model of the modern, for-profit hospital that we know today. This, in turn, has led to the exciting turn of private equity firms buying up hospitals and running them into the ground for fun and profit.
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Healthcare as a for-profit industry is ultimately not a thing that works for anyone but those making the profits. It does not make sense, practically, in a world where we need to prevent the spread of contagious diseases, where we need people to be able to work, and where the medical departments we need the most don’t necessarily drive a profit in the first place, and, when you think about it, really actually shouldn’t. Because, I don’t know about you, but I think it would probably be bad if it were even more expensive to give birth in this country than it already is.
Hopefully, this bill will pass and we’ll get at least a little bit of the change we need in our healthcare system, and if rich people want to put money into hospitals, they can do so with their taxes and their charitable donations. Not by buying them up in hopes of churning a profit.
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This is great policy and I honestly had not realized this was a thing that could happen. I remember this of course from watching Jake Williams (Bright Sun Films) on YouTube and learning some of the mechanics of private equity in sandbagging brands we all know and love.
It's nice to see some legislative efforts like this, and hopefully if Congress can change hands to an impeachment+removal-sized majority (over Fetterman and others like him) then it is more likely we can maybe have nice things like this.
Remember: You can't get beneficial, pro-people policy out of the unreconstructed Republican Party. All they offer you is sadopopulism, tormenting minorities that Americans hate while they loot the treasury.
Is your registration all set? Have your polling place secured? Have your voting plan together?
Mount up!
And Don't Give Up The Ship!
I had good friend who was a doctor who fell victim to his clinic being acquired a private equity firm and destroyed everything he had worked for years to build.
And, yes, I speak of him in the past tense because he took his own life a few years ago and, though it wasn’t the only factor, I believe the collapse of his clinic played no small part in what drove him to it.