Bill Schubart: Keep Private Investors Away From Nonprofits In Health Care, Journalism, Corrections

The forays of private investors into nonprofit health care, journalism, and corrections are causing unprecedented social and economic damage for windfall profits.

Private equity investors, typically limited companies, look for the right mix of equity and debt and typically buy and restructure unlisted companies.

With few regulatory hurdles or constraints, they are increasingly seeking opportunities in the nonprofit sector that allow them to get cash value from taxpayer-funded government resources like Medicare, Medicaid, and Social Security.

Vermont (and the country) has three economic sectors.

• A profitable industry for companies looking for opportunities and profits.
• A non-profit sector that promotes social missionary work.
• A "by the people, for the people" government sector that controls and uses taxpayer money to fund traditional public institutions such as public education, the postal system, broadcast spectrum, transportation infrastructure, criminal justice, environmental monitoring, fair trade, and social security. . systems, etc.

In the health care system

With the ongoing uncertainty over whether health care in Vermont is a business or a public good, we increasingly see harm from buyouts of hospitals, many of which are funded primarily by insurance and federal agencies, and Get Medicare Advantage plans then change cost of premiums, deductibles and coverage to improve profits.

Although most public hospitals and medical centers in Vermont are legal nonprofits, because hospitals are regulated everywhere, they are fairly free to operate as businesses. Budgets, rate approvals, and "certificates of public welfare" were not issued with reference to Vermont's stated purpose of "public health."

Weill Cornell Medicine recently released its findings that private ownership of nursing homes is associated with lower quality of care and thus higher health insurance costs;

“Health care facilities bought by private equity firms have increased emergency room visits and hospitalizations for long-term residents and higher Medicare costs, according to a new study by researchers at Weill Cornell Medicine.

The findings, published Nov. 19 at the JAMA Health Forum, show that the quality of care has declined when private equity firms have taken over facilities. "Our results suggest that private facilities provide lower quality long-term care," said Dr. Mark Unruh, associate professor of population health sciences at Weill Cornell Medicine. "These residents are among the most vulnerable in our health care system, and the lack of ownership transparency makes it difficult to identify private facilities that can care for consumers."

Kaiser Health News also recently reported on a new phenomenon called "patient financing," a burgeoning business in which private equity and banks fund medical bills that families can't afford.

“With Americans saddled with medical bills, patient finance is now a multibillion-dollar business, with private equity and big banks lining up to collect money when patients and their families can't pay for treatment. Market research firm IBISWorld estimates margins in the patient finance industry at more than 29%, seven times hospital margins that are considered sustainable.

Hospitals and other providers that historically enrolled their patients in interest-free payment plans have embraced financing by making deals with lenders and luring patients into financing programs with attractive promises of convenient billing and easy payments.

The modern palliative care movement, founded by Dame Cicely Saunders in London in 1967, began as a social mission to provide a dignified and supportive end-of-life experience. It has long been an integral part of every health care system and existed in Vermont as an independent, non-profit organization, the Community Nurse Association, until 2017 when it was admitted to the UVM Health Network. Since then, ongoing staffing issues at UVM Health Network have led to the termination of care. for people with reduced mobility.

As The New Yorker magazine recently reported, hospice has become a multibillion-dollar business in the country. "How a hospice became a profitable shack." It all started with a visionary idea so that patients could die with dignity at home. It is now a $22 billion industry suffering from exploitation.”

Health News also blames the negative impact of private investment on health care. This was recently reported by the National Public Radio. "Recently released federal audits reveal widespread overpayments and other deficiencies in Medicare Advantage health plans for seniors, with some plans overpaying the government by an average of $1,000 a year."

Uncertainty about whether health care in Vermont is a business or a dedicated business has left private investors looking for short-term gains. The basis of non-profit organizations is a social mission, not profit. When private equity invests in a social service organization, profit and mission goals collide.

In journalism

Unlike health care, where the goal is to make a quick buck from the taxpayer-funded resources of federal programs that support health care, or, as one cynical friend put it, to "suck the FBI," journalism's goals are ambiguous. income, if any, and policy.

Of the two, I'd say right-wing political goals are the more motivating factor.

There are many reasons to fear that private equity and media giants will gobble up local and hyper-local print and broadcast news. The goal seems to be to eliminate editorial and local infrastructure costs and then inject syndicated content into what's left.

Sinclair Broadcasting and Gray Television are two of many conservative companies buying troubled local media companies.

The corporate sector has been and will be dominated by the free market's pursuit of profit. But it is within our power to limit what they do in the nonprofit sector, and we must do so if we are to preserve the concept of the mission of investing in social security, especially in the face of heightened conservative rhetoric.

"We will see more attacks on public institutions: libraries, universities, school boards, news agencies. They will be difficult to analyze and perceive as related.” — Melody Kramer, Nieman Labs.

As I have written before, the steady decline of local printing and distribution organizations is a serious threat to democracy. Meanwhile, the rise of nonprofit journalism is a hot topic these days, and private capital cannot be allowed to co-opt it.

In the penitentiary

The criminal justice system, from the courts to the prisons, is a primary responsibility of government. But then again, camel-nosed business has long enjoyed the benefits of a taxpayer-funded system.

GEO Group, with $616 million in sales and $38 million in net income, and CoreCivic, with $465 million in sales and $68 million in net income, won state prison housing contracts, including in Vermont.

The Vermont Department of Corrections hired CoreCivic to house approximately 145 Vermont inmates at the Tallahatchie County Correctional Facility in Tutwiler, Mississippi, at a lower cost than Vermont inmates.

President Biden promised to close private federal prisons in 2021, but has not followed through on his promise.

A new and disruptive element not found in Vermont are "janitors," private prisons for elite criminals that offer high-end daily services, customized meals, Wi-Fi, family visits, and more. costs about $130 per person per day.

However, it is quite appropriate that the public sector allows and welcomes partnerships in the for-profit and not-for-profit communities when they contribute to exclusion and reducing recidivism, as is the case with much vocational training and apprenticeships.

Vermont's nonprofit sector is rich with educational and social opportunities in prisons, such as: B. Writing Inside, Children's Literacy Fund, Liberal Arts In Prison, Mercy Connections Mentorship, Step Out VT, and courses at Vermont Community College. All of these are living examples of effective cooperation between the non-profit sector and a public institution.

As Vermont poet Robert Frost said in his poem "The Permanent Wall," "Good fences make good neighbors."

If we are to champion and support the diverse goals of our three spheres: business, mission, and government, we must be acutely aware of the limitations of each. We must properly regulate and tax the corporate sector to support public institutions. We need to be clear about what is a corporation and what is a mission-driven nonprofit. And we need to set clear boundaries.

To that end, I would like to propose that the Vermont Legislature pass the following legislation within the next two years:

“Act XXX prohibits private investment in Vermont's nonprofit health care, journalism, and correctional facilities. Nothing in the Act shall be construed as a limitation on donations, partnerships or philanthropy in connection with business programs. »

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Legendary investor Steve Cohen with Glen Furman. on investment, philanthropy and the arts