Oct 23, 2019

Private equity maximized profits while sick children were neglected

A nursing company controlled by private equity firms left a trail of injury reports and seven child deaths last year as it pushed to maximize its profits, Bloomberg News reports, citing inspection reports, internal documents and interviews from former employees.

The big picture: "Home health care is considered an especially promising private-equity investment because it can save on expensive hospital stays, while generating revenue for years," according to Bloomberg.

The company, Aveanna Healthcare, is controlled by private equity firms Bain Capital LP and J.H. Whitney Capital Partners LLC.

  • Aveanna had an abundance of violations in some of its biggest markets.
  • Its vetting process had failed background checks, face-to-face interviews and reference checks, per Bloomberg.
  • More than 12 former employees said they felt pressured to meet financial goals, which jeopardized the quality of care for children.

The other side: Aveanna said deaths were rare and cited surveys of thousands of patient families that said 97% were satisfied with their care.

Go deeper: Private equity's thirst for health care providers

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Private equity on defense in Washington

What's believed to be the first congressional hearing in recent years squarely focused on the practices of private equity firms is happening later this morning.

Why it matters: Private equity is facing "the most serious political challenge it has seen in years," per the WSJ.

Go deeperArrowNov 19, 2019

The risks of private equity in health care

Private investment into the health care sector may bring innovation, but it's also led to revenue-seeking behaviors at the expense of patients, three employees of The Commonwealth Fund argue in Harvard Business Review.

By the numbers: There were nearly 800 private equity health care deals in 2018, with a total value of more than $100 billion.

Go deeperArrowOct 30, 2019

House hearing on private equity lands with a whimper

Sens. Elizabeth Warren and Bernie Sanders. Photos: Sarah Rice/Scott Olson/Getty Images

Tuesday's House of Representatives hearing on private equity landed with a whimper, after more than a week of escalating rhetoric from progressive Democrats.

Reality check: Even if Sen. Elizabeth Warren wins the presidency, she would have a tough time getting her "Stop Wall Street Looting Act" through Congress, with or without Democratic Party control of both chambers.

Go deeperArrowNov 20, 2019