Corporate Greed in Health Care: A Metastasizing Disease
The increasing corporatization of the U.S. health system often prevents people from achieving and maintaining their best health. Large hospital systems are closing locations in lower-income communities. Individuals are frequently forced to choose between seeking medical care and facing overwhelming debt. This situation is perpetuated by dominant players in the industry and their unchecked consolidation of power, prioritizing profits over community health. This detrimental trend affects us all.
At Community Catalyst, we collaborate with partners to shed light on the corporate interests driving decisions in health care. We aim to demonstrate how prioritizing profit over people’s well-being harms both our communities and our nation.
It’s imperative for policymakers to heed the voices of their constituents, prioritize people’s health over profits, and take meaningful action.
Rapid consolidation among hospitals, insurers, and providers has led to an intense concentration of power by a few players – and with that, the ability to extract profits at the expense of patients, communities, and our nation’s health. And private equity’s growing foothold in the industry is only making these problems worse. Unchecked control of health care by private equity (PE) is, simply put, a metastasizing disease threatening health care in this country. We need to put people over profit and urge policymakers to take action.
The Problem at a Glance
- Health care markets are increasingly concentrated, which increases the price of services.
- Behemoth non-profit health systems behave like profit-making enterprises, expanding in affluent areas and divesting in poorer communities.
- There were more than 1,400 private equity deals in health care in 2021, totaling $209 billion. There has been a sixfold increase in the number of physician offices acquired by PE over the last 10 years and 30% of for-profit hospitals in the U.S. are now owned by PE. These investments touch virtually every aspect of health care, including nursing facilities, hospitals, physician specialties such as gastroenterology and anesthesiology, emergency medicine, dentistry, travel nursing, durable medical equipment, behavioral health, disability services, and health care services for people in prisons and jails.
- Private equity acquisitions in health care are associated with higher prices and increases in patient mortality.
When profit trumps community health, we all suffer. The impact of these decisions affect people like:
- New mother Sungida Rashid, who bled to death in a hospital because necessary devices had been repossessed after the private equity-backed parent company failed to pay the bills.
- Patients at St. Joseph Hospital in Illinois and Genesys Hospital in Michigan who lingered on gurneys with serious, time-sensitive problems; developed bed sores because they were not repositioned often enough; and lay in their own excrement. Both hospitals are owned by the large hospital system Ascension Health, which consistently understaffed hospitals in order to increase profits.
Pressure for action builds
On June 5, 2024, Community Catalyst and a broad coalition of more than 90 multi-issue local, state and national organizations, including Americans for Financial Reform, the Private Equity Stakeholder Project, and Service Employees International Union, submitted comments to the Biden administration on the dangers of private equity control of health care and recommendations for federal action.
The same day, Community Catalyst submitted separate comments to highlight broader concerns about consolidation in health care markets and existing authority for federal agencies to address these issues.
Our policy requests are clear:
The Department of Health and Human Services (HHS) should:
- Increase transparency on private equity ownership and management of Medicare providers.
- Address improper insurance denials by Medicare Advantage and private plans.
- Investigate whether health care companies that own both insurance businesses and health services providers are undermining protections for patients.
- Use its annual reports on health care consolidation to highlight the impact on patients.
The Federal Trade Commission (FTC) should:
- Limit facility fees, which are an incentive for hospitals to acquire previously independent physician practices.
- Investigate and report on the impacts of private equity and consolidation in health care.
- Bring enforcement actions and issue rules regarding unfair practices and unfair methods of competition by health care entities owned or managed by private equity companies.
- Enforce the Federal Trade Commission Act, including the recent rule on non-competes, against purportedly “nonprofit” health systems that are operating like for-profit entities.
The Department of Justice (DOJ) should:
- Forbid private equity-owned companies from providing health care services to those incarcerated in the federal prison system.
- Investigate and prosecute health care fraud by private equity companies, using new HHS data to identify trends and patterns.
- Encourage providers and other staff at health care entities to come forward with allegations of substandard care or improper billing and establish a portal for whistleblowers to report these claims.
- Challenge anticompetitive practices in health insurance markets, including restrictive contract terms between health insurers and hospitals.
- Investigate MultiPlan, a health data company that provides services to help insurance companies determine how much to pay for out-of-network care.
Read the coalition comments to the US Department of Justice (DOJ), the Federal Trade Commission (FTC) Health and Human Services (HHS) here.
Read Community Catalyst’s comments here.
Get Involved
Add your name to our petition to demand policymakers take action now.