At Hearing, Warren Rails Against Private Equity in Health Care for Increasing Prices and Lowering Quality, Calls for Ownership Transparency
Hearing
"Thank you, Mr. Chairman and Ranking Member Braun, for holding this hearing on price transparency.
For almost every other type of service, you can look up the price before deciding whether or not to purchase. But when it comes to health care, it is virtually impossible, even though Americans are paying more for health care than in any other country in the world.
So, when patients need health care, they should be able to easily find out the price of those services. Here's something else they should be able to find out easily: who owns the hospital or the physician practice that you or a loved one may visit to receive that care. Today, nearly 80% of doctors are employed by corporate entities, including private equity firms, and once in control, these firms raise their prices and cut corners to line their own pockets while the quality of care suffers.
So, let me start with you, Dr. Whaley. You are an expert on private equity and health care. If a patient wanted to find out whether a neighborhood hospital or a primary care practice was owned by private equity, how hard would that be to do?
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"Yeah, so virtually impossible. Because private equity firms don't have to report ownership, it is nearly impossible to find out if the doctor's office you visit is owned by one of these corporate vultures.
Well, let's ask about the workers. How hard is it for the workers to find out? Ms. Opsahl, you lead the health fund at labor union 32BJ. If one of your members wanted to find out if a potential employer of any kind was owned by a private equity company, how simple would that be to do?
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"Okay, so next to impossible, virtually impossible.
I'm sensing a trend here. Patients can't find this information. Workers can't find this information. Even antitrust regulators have a hard time finding this information. These are the agencies that are responsible for cracking down on anti-competitive behavior, and they can't get their hands on these data.
And it matters, because private equity ownership has real consequences for the families and the workers who need help here.
So, Dr. Whaley, once private equity firms take over health care companies, what happens to health care cost and quality?
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"So I just want to relate this to the earlier line of questions where you said people are using higher price as a signal that they're going to get better care, and yet the data show us that when private equity takes over, price goes up and quality of care actually goes down. Is that right, Dr. Whaley?
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"So not just one study. You see it across the board in all of the studies that have looked at this.
You know, I saw this firsthand in Massachusetts after private equity drove Steward Health Care into bankruptcy, and that is why I introduced the Corporate Crimes Against Health Care Act, which, among other things, would require private equity owned health care companies to publicly report mergers, acquisitions, changes in ownership and control and financial data, so at least the information would be out there.
Let me ask, Dr. Whaley, would these data help state and federal regulators prevent crises like the Steward failure in the future?
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"It is shameful that these firms can hide in the shadows while patients and workers suffer.
My Corporate Crimes Against Health Care Act would shine a light on private equity's most parasitic practices. It would also claw back compensation from private equity executives that drive portfolio companies into bankruptcy. It would impose criminal penalties on executives when their failures result in patient deaths. And it would empower regulators to prevent crises like Steward from ever happening again.
There's a lot of work we need to do here, Mr. Chairman. Thank you."
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