unregulated pirates come with a price;

 

Private equity.

The term once seemed sophisticated and mysterious.

Now it’s usually uttered as a curse.

For example, a friend recently lamented that, “Private equity just bought Jersey Mike’s. They’re going to ruin it…”

The private equity (PE) model is simple. Raise money from investors, take out huge loans, buy companies, improve efficiency, and sell it for a higher price.

That’s the goal, anyway.

Private equity first got my attention back in 2005 when three PE firms bought Toys ‘R’ Us. They loaded the company with $5 billion of debt, took huge paydays, and killed the company.

Since then, private equity firms have raised and borrowed trillions of dollars.

They are quietly buying up HVAC companies, dental offices, and most disturbingly, hospitals and nursing homes.

PE ownership of hospitals is particularly worrying. According to a 2023 review in JAMA, a respected medical journal, the results are not good.

“Private equity acquisition was associated with a 25.4% increase in hospital-acquired conditions, which was driven by falls and central line–associated bloodstream infections.”

So in hospitals owned by PE, patients are getting worse care. They’re getting more infections, waiting longer in ERs, and falling more often..........more.......