Commercial owners are taking over infrastructure and primary care medicine

Investment Analysis Clubs Macro Economic Trends and Risks
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We have seen over and over how takeovers of companies by private equity asset managers has resulted in the siphoning of money into the managers’ pockets while bleeding the productive enterprise dry, often turning the company into a zombie or bankrupted it.

Now they are moving into infrastructure and primary care medicine.

The Unfortunate, Unintended Consequence of the Inflation Reduction Act

By Brett Christophers, The New York Times, May 8, 2023

…
The Inflation Reduction Act will help accelerate the growing private ownership of U.S. infrastructure and, in particular, its concentration among a handful of global asset managers like Brookfield. This is taking the United States into risky territory. The consequences for the public at large, whose well-being depends on the quality and cost of a host of infrastructure-based services, from energy to transportation, are unlikely to be positive…

The I.R.A. will radically overhaul the culture of public ownership of infrastructure. Informed by what Brian Alexander, a writer for The Atlantic, in 2017 described as a profound recent change in philosophy among U.S. policymakers about “how to build and maintain America’s stuff,” the modus operandi of both statutes is principally to subsidize and catalyze private-sector infrastructure investment…

The story of asset-manager-led infrastructure investment is overwhelmingly a negative one. Asset managers are focused on optimizing returns on the assets they control by maximizing the income they generate while minimizing operating and capital costs. Many users of infrastructure that has come under asset manager ownership have suffered, as service rates have risen quickly and service quality has deteriorated… [end quote]

Corporate Giants Buy Up Primary Care Practices at Rapid Pace

Large health insurers and other companies are especially keen on doctors’ groups that care for patients in private Medicare plans.
Reed Abelson

By Reed Abelson, The New York Times, May 8, 2023

…
So why are multibillion-dollar corporations, particularly giant health insurers, gobbling up primary care practices? …

The appeal is simple: Despite their lowly status, primary care doctors oversee vast numbers of patients, who bring business and profits to a hospital system, a health insurer or a pharmacy outfit eyeing expansion.

And there’s an added lure: The growing privatization of Medicare, the federal health insurance program for older Americans, means that more than half its 60 million beneficiaries have signed up for policies with private insurers under the Medicare Advantage program. The federal government is now paying those insurers $400 billion a year…

The absorption of doctor practices is part of a vast, accelerating consolidation of medical care, leaving patients in the hands of a shrinking number of giant companies or hospital groups. Many already were the patients’ insurers and controlled the distribution of medicines through ownership of drugstore chains or pharmacy benefit managers. But now, nearly seven of 10 of all doctors are either employed by a hospital or a corporation…

The companies say these new arrangements will bring better, more coordinated care for patients, but some experts warn the consolidation will lead to higher prices and systems driven by the quest for profits, not patients’ welfare…

Experts warn these major acquisitions threaten the personal nature of the doctor-patient relationship, especially if the parent company has the authority to dictate limits on services from the first office visit to extended hospital stays. …[end quote]

These are scary trends for society as a whole.

However, investors may profit by joining the gravy train.

Wendy

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Maybe government should stay out of subsidizing and promoting businesses. It might then not need to increase the debt ceiling.

Less Pork = Lower Debt Ceiling - LP=LDC

The Captain

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Corporate giants are buying up more than primary care practices. Here in TX where I live they have taken over the emergency room, radiology, anesthesia, hospitalist to name a few that I know of. The corporation will come in, get the contract at a hospital for a service like hospitalist, hire as many hospitalists as they can that will stay and work for them, then bring in a bunch of temps who will work there until they can get adequate staffing. Usually the temps are poor quality physicians who don’t communicate with each other and may even struggle to speak english. The hospitals give these contracts away to get out of paying or stipending the in house groups. The administrators bottom line is profit even at not for profit hospitals. These forked tongue individuals talk about improving quality and efficiency but what they are really saying is we want it cheap cheap cheap to maximize profit. IMHO of course…doc

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More hysterical nonsense. We have been assured, by the “supply side” that the road to nirvana includes privatizing everything. Remember when our guys were fighting a made up war in Iraq, and the food service, construction, trucking, were all contracted out to cronies? That is the objective for everything in all of Shiny-land. Has been the objective for 40 years. That is why a law was passed, decades ago, forbidding the Navy to build it’s own ships, and reserving a major percentage of refit work to private yards. Since then, many of the Navy Yards have closed, because the work, and profits, have been reserved for the “JCs”

Steve

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This is misreporting. My PCP is in a hospital system so what? That does not mean they are part of a large corporation. It is dishonest to at all infer they are. It is abusing the readers.

As for the $400 billion that is saving us money. The beneficiaries are biding their time saving money while healthy or can not afford Medicare because of the co pays.

Listen seniors you supported supply side econ at least 15 years longer than you needed to after 2008. The first reason for doing that was evil racism on two fronts, the WH and just being good to people who were not white.

Now most men my age can not nearly afford to retire. That is the results of supply side econ. You get what you deserve.

But you might get bailed out. Those entitled Millennials are very decent people and want an major expansion of the US economy. If you smarten up you might get taken care of by them. But at your current rate you have a house of reps who want to hurt you and hurt you bad. You supported them, you may get what you deserve. It was your idea.

If you believe a lie for 40 years you are an ejit.

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You are mistaken. Corporate ownership of primary care practices is very common in these parts and elsewhere. Especially urgent care clinics.

For but one example…the corporate owner of one of the largest primary care groups in Colorado. Exactly as described in the article. Of concern to everyone, not just Medicare beneficiaries … or should be.

Optum https://www.optum.com/

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How am I wrong my PCP’s hospital is not owned by a ‘larger’ corporation. There are plenty of hospitals not owned by ‘larger’ corporations. The inference equates hospitals to larger corporation ownership.

I was not discussing urgent care clinics. I was discussing what is not an urgent care clinic. On the west and east coasts there are many hospital systems that are not owned by ‘larger’ corporations. You know where the bulk of the population is to make up that 7 in 10.

There is another piece to this. The doctors are all in contracts but in time the doctors will reconfigure when it suits them after the contracts lapse. Meaning doctors go in and out of arrangements depending on what suits them. The corporate owners of urgent care clinics will eventually find themselves in competition with many of the doctors who were working for them. How? There are other insurers that will start other networks in a given state. The doctors as their contracts lapse will go to greener pastures. The business world signs new health insurance contracts almost yearly like clockwork. So far that has not driven down doctor’s pay.

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Your PCP’s office may not be corporate owned (neither is mine … yet) but it’s good to remember … personal experience is, by definition, limited experience. If you are unaware of the extent of corporate ownership of medical facilities you should educate yourself. You are from a medical family after all.

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This has shifted with the pandemic hurting hospitals financials but remains a good starting point.

Nearly a quarter — 24 percent — of community hospitals in the U.S. were classified as for-profit in 2019, while more than 57 percent were nonprofit and nearly 19 percent were controlled by a state, county or city government.Aug 19, 2021

VeeEnn there are stats and there are stats. Nonprofit hospitals and state hospitals dominate this country’s care. The doctors in the nonprofit hospitals are better than in clinical settings generally speaking. In my area the doctors work in satellite offices as well as their hospital settings.

This due diligence was easy for either of us to do. Stop assuming things.

As for the NYT writer just lazy lazy lazy.

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Some of the largest hospitals are organized as non-profit corporations. The Mayo Clinic for example, and countless others.

From the customer/patient point of view, profit or non-profit is essentially a distinction without a difference. That’s because the main difference is that in a non-profit corporation, the “profits” are plowed back into the business and distributed to the administration via salary and benefits, and in a for-profit corporation, the “profits” are plowed back into the business, distributed to the administration via salary and benefits, and distributed to the owners of the corporation.

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Not assuming things … but referring to PRIMARY CARE settings just like the thread start and contained articles.

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That doesn’t protect your wallet.

The author of this book was on Amanpour last night. Remember the rhubarb about “surprise medical billing” a couple years ago? The issue was that, while the hospital may be “in network”, the individual attending personnel may not be employees of the hospital, but, employees of a company that is not in network, resulting in exorbitant bills. The “Commies” in Congress did something about that, for now, but regime change in DC can reverse that just as easily as the new regime in Lansing repealed the previous regime’s law making Michigan a “right to work” state. In the interview last night, the author noted that about 40% of hospital ERs are not run by the hospital, but, rather, by a Private Equity firm, that is not in anyone’s network, because of the potential to ring up high profits.

PlunderZZZ_SX500_

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When I went to the ER for a couple stitches last summer, I discovered that the Doc who stitched me up is not an employee of the Beaumont hospital system, whose name is on the building. He works for another company. Fortunately, my Communistial “big gummit”, “one size fits all”, Medicare pays “any willing provider”, so I was not billed thousands.

Steve

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In January of 2011 I had to undergo “emergency” spinal cord surgery. (I was in surgery 10 days after the MRI and after another patient in the schedule was pushed out to make room for me). I literally had no time to “shop around”. I did find a network surgeon and hospital. And that was all I had to worry about.

Each decade I was told I’d have 20% chance of another surgery. What will I have to do this time around? Make sure the surgeon and hospital are in-network sure. But the aneastheoligist? (spell check couldn’t help me here). Various nurses and assistants? Imaging people? Where does it end?

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Mark,

Non profits and university hospitals are not major corporations. They do not espouse people join Medicare Advantage plans. The level of care is far better. Teaching hospitals develop better doctors of all experience levels. Keeps doctors on their toes to teach.

Corporate for profit hospitals let more things “slide”.

VeeEnn again 57% of non profit hospitals generally have medical practices that are not bought up by big pharma/insurance/larger corporations. That was the poorly made point of the article that indeed buying up all the practices was happening.

The problem though are the minority that have sold to larger corporations. Bad and even tragic results will follow.

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In 1998 when one of our children was born, based on the advice of the insurance company we “pre-registered” and got pre-approved for the birth procedures. This was about 2 months before the delivery date. The hospital submitted all the forms, the insurance company received them, and a few weeks later we received a letter basically stating “you’re good to go.” Then early one morning my wife goes into labor, we take a walk, when the doc opens we visit them for a quick checkup, and the doc sends us straight to the hospital with him not far behind. Hospital has an anesthesiologist to provide epidural, that is done, and the baby arrives an hour or so later. Two days later my wife goes home. A few weeks after that, we receive a curious and absurdly high bill in the mail from some anesthesiologist group. My wife slowly investigates via phone, and it turns out that in the 2 months between pre-approval and delivery, this anesthesiologist group was dropped from our insurance plan. Well … my wife argued with them for a year and a half, and in the end, the insurance company and anesthesiologist group came to some sort of agreement between each other and we paid nothing additional.

As mentioned above, today there is some sort of law against these kinds of surprise bills. No doubt you still have to argue somewhat, but probably not a year and a half of arguing.

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The surprise bill came from the doctor. Of course. But the surprising crazy system of private insurance is the entire problem.

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Actually, the bill came from the group and that could have been a local group or the local arm of a national group. I worked in a small college town for the last 15 years for a group that was owned by a corporation that had anesthesia contracts for over 200 hospitals in the USA.
Corporations are dropping from health insurance plans because they keep decreasing reimbursement to physicians to increase profits. I’m not defending corporations or anesthesia groups, just trying to let you know the why. Our local group of radiologists declined the offer from the hospital as they cut the guaranteed offer to the group for coverage and now we have some national corporation sending in radiologists from all over the States to cover and read all the studies. The guys we had were excellent, the travelers are not. Many can barely speak English. The hospital is happy because they are saving money - not for profit hospital owned by the nuns. This hospital will again send some 50 to 100 million as a gift to the Vatican this year…doc

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Another thing is sending the scans to be read overseas by radiologists. At first I was horrified by that practice, but some have shown that they have as good or better accuracy rate as local radiologists reading the scans. I’m not sure if it is because those radiologists are “better” in any way or because they may have multiple radiologists look at the scans when necessary. Whereas a local scan will usually only be looked at by the local radiologist on duty at that time. I don’t know though … it could all be BS they are trying to sell us in order to reduce costs.

There may also be an additional advantage or sending the scans elsewhere. A few years ago, one of my kids fell and might have broken something. It was a weekend, 5 or 6pm on a Sunday, and we went to an urgent care facility. They took a scan (X-ray maybe) and sent it via email to their radiologists. Less than an hour later, the results came back (luckily negative for a break). Had we gone to an ER, it would have cost us MUCH more and we would have had to wait much longer, possibly deep into the night and perhaps even the next day.

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A physician that reads a study for an American patient has to be licensed in that state to read and make diagnosis. It would be great for hospitals if they could get super cheap doctors in poor countries to read studies, but they would get in trouble with state medical boards if they tried this. The quality of a foreign physician who trained in another country will be way inferior to one trained in the US IMHO. I may be biased. Anyways, I don’t think this is happening…doc

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