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Tuesday, December 19, 2023

Increasing Profitability

There was a gut wrenching article in yesterday's Washington Post, all about how the rise of investors in the assisted living biz are causing real human damage.  And it has implications for the privatization of education.






The piece opens with the story of the Balfour chain that realizes they need to hire additional staff for one of their facilities. But to do that, they have to ask their owners, the Welltower investment firm, a real estate investment trust that invests in healthcare infrastructure. And here's how that went:

Executives at Welltower balked.

“Their position was: We are trying to increase our profitability,” said one former Balfour executive, speaking on the condition of anonymity to discuss internal matters. “Care is an ancillary part of the conversation.”

Care is an ancillary part of the conversation.

This will forever be the problem with handing over any organization doing the work of caring for human beings to a profit-driven free market operation. 

This is the problem with all investment fund ownership of any business at all-- whatever the business is supposed to be doing, from making widgets to selling breakfast cereal, becomes an ancillary concern. It is a Kafkaesque world in which a business's business is not really its business. In the hands of hedge fund vultures, its main business is profitability; whatever its nominal purpose becomes just a means of increasing profitability, and if that means gutting workforce or increasing prices or lowering quality or any number of things that soak the customers without adding value. 

This is bad enough for widgets and breakfast cereal, but it is intolerable if the work is any sort of human service, like medical care or nursing homes or schools. There the interests of the investment firm will always be in conflict with the interests of the human persons being served. And that's how we arrive at "We're not going to provide better care for these people because it will cut into our profits." 

That's how we arrive at "Care is an ancillary part of the conversation." 

Any economic system can be abused by people with a busted moral compass. I have no beef with the free market--it has and can accomplish some great things. But even in the best of hands, it is ill-suited as a tool for managing the care of human beings.

Education should not be an ancillary part of the conversation about a school and the students in it. Ever.

Posted by Peter Greene at Tuesday, December 19, 2023
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2 comments:

  1. edblisaDecember 19, 2023 at 11:27 AM

    If you think it's bad in the geriatric/nursing home industry, just march yourself into a large city/suburban hospital (the E.R.is especially heinous and life threatening!) that has been taken over by an Investment Firm (Ascension, Global etc). The privatization of every common good has become dystopian.

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  2. AnonymousDecember 19, 2023 at 2:25 PM

    Privatization generally results in the public paying more for a worse service. Private equity should not own any service that is connected to health or well-being. This includes prisons, juvenile facilities, nursing homes, hospitals, doctor practices and education. They will always put profit above the needs of people, and they will cut services in pursuit of greater profit.

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