5 min read

Private Equity's Impact On Hospice Care with Laura Katz Olson

By: Chris Comeaux on 9/18/24 5:00 AM

hospice care Laura Katz Olson Private Equity Ethically Challenged

In this episode, Private Equity's Impact on Hospice Care, The Good, the Bad, and Ugly of Private Equity, Chris interviews Laura Katz Olson, a professor of political science at Lehigh University. It’s a fascinating discussion based on Laura’s book Ethically Challenged.

During their conversation, they delve into the impact of private equity in the healthcare industry. Private equity firms prioritize making oversized profits and have a short-term focus, often selling companies within six years, relying heavily on debt financing and putting the burden of servicing the debt on the acquired companies. Leaving a company worse than when the started is the opposite of what leadership is supposed to do for any organization, especially one with such a critical mission.

Private equity firms also are secretive and not required to report to the SEC, making it difficult to gather information about their activities. Effectively, they can operate behind a black curtain of secrecy while much of healthcare has the opposite requirement.

The healthcare industry, including Hospice and home health, has become a target for private equity investments. Private equity firms invest in various sectors, including healthcare, dentistry, air ambulance, and autism care. And in each, there is only a focus on making profits rather than providing quality care. The secrecy surrounding private equity makes it difficult to track where the money is being invested.

The playbook of private equity inevitably leads to a decrease in the quality of care as they prioritize profits over patient well-being. Also, the playbook of private equity creates a concentration of private equity ownership in specific sectors, which raises concerns about monopolies. Still, the FTC does not look at them as such. As this playbook plays out, we are beginning to see increased bankruptcies, leaving communities worse off than before private equity entered the market.

This is a great listen for staff, leaders, and Boards of Hospice and Palliative Care organizations to become more educated on this topic. We have seen the increase of the influence of private equity in the Hospice movement for quite a while now. This podcast will help you understand what is going on. Join us; this is timely and relevant.

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