Private Investing In Healthcare Is Good Medicine
Forbes
Far-left political leaders, increasingly in tandem with subsidy-seeking business entities and progressive groups, villainize various private-sector producers for problems the government has too often created. Instead of constructive solutions, they hurl epithets. From agriculture and energy producers to drug developers and industrial manufacturers (or any sector progressives attach their “Big” moniker to these days), extremists attempt to publicly shame innovators, investors and employers and then follow up with punitive measures, no matter the human and economic costs.
This irresponsible form of political theater is on display regarding the necessary and critical role capital investing plays in today’s healthcare sector. Take the well-publicized case of the collapse and bankruptcy of Steward Health Care, a hospital system that had struggled financially before being acquired by a private-equity firm and then grossly mismanaged from 2010 to 2020. According to credible reports, its failure and painful facility closures across the country were caused by mismanagement and the looting of financial resources by insiders running the company. Rightfully, those responsible are being held accountable.
The scandal has been highlighted endlessly in an attempt to tarnish the entire private-investment community. However, taking isolated and odious episodes like this and using them as a pretext to impose punitive legislative and regulatory punishments on the rest of the private-investment community is shortsighted and harmful to people’s health. It will reduce essential capital to communities and healthcare stakeholders who need it the most. For every example like Steward, there are numerous others in which private capital provided a critical lifeline of investment and management expertise to help struggling healthcare systems survive and thrive.
A 2020 analysis found that private capital had invested $15 billion in hundreds of urgent care centers, which are much needed for patients in urban and rural areas hard hit by hospital closures and shortages of primary care providers. Research from Georgetown University shows that hospitals backed with private capital experienced increased wages; moreover, doctors and health professionals were able to spend more time with patients because of reduced administrative, legal and regulatory burdens.