ETHICALLY CHALLENGED

Private equity firms are weakening America’s medical industry and hurting patients with their callous drive for profits, according to this sobering exposé.

Lehigh University political science professor Olson, who previously wrote about the industry in The Politics of Medicaid (2010), probes the takeover of much of the health care sector by private equity firms that buy companies with borrowed money and saddle them with enormous debt obligations; the PE owners then service these debts and wring profits out of their new companies by slashing costs, raising prices, and laying off workers, with an eye toward quickly selling the company again (often to another PE firm). Olson patiently unravels the labyrinthine dealmaking by which PE firms have bought hospitals, medical specialty practices, dialysis clinics, rehab centers, nursing homes, hospices, dental offices, and ambulance services, sometimes assembling them into giant health care monopolies. The results, she contends, have been dire. The pressures of debt and profit-seeking incentivize PE managers to cut budgets; shift care from highly trained doctors to lower-skilled, underpaid, and overworked nurses and physician assistants; skimp on supplies; lower standards while also performing unnecessary procedures; engage in upcoding; raise prices; and hound patients who can’t pay the resulting inflated bills. She uncovers many horror stories at PE–run facilities; for example, dermatology practices that misdiagnosed cancer as eczema, inadequately anesthetized kids strapped down for agonizing root canals on their baby teeth, autistic teens beaten and sexually assaulted, epidemics of billing fraud, and car-crash victims who get $60,000 bills for a flight of a few miles in a medevac chopper. Olson draws on press reports, regulatory filings, and her own interviews with health care workers to flesh out a detailed and troubling picture of private equity depredations. Her research is far-ranging and meticulous; she names names, crunches the numbers, and shows her receipts, conveying her findings in lucid prose lit with flashes of passion. Hers is a finely honed critique not just of malpractice and financial hubris, but of a dispiriting moral shabbiness that’s poisoned a field that should be idealistic and humane. Many readers will feel similarly outraged at the avarice she unearths here.

A disturbing, timely report on the deep corruption of health care by capitalism run amok.