Murphy Issues Warning About Private Equity's Takeover Of Health Care At Brookings Institution

WASHINGTON-U.S. Senator Chris Murphy (D-Conn.) on Thursday delivered remarks at "Lessons From the Collapse of Steward Health Care," a Brookings Institution event convened to discuss how Steward Health Care evaded regulatory oversight and eroded patient care at several hospitals, part of a troubling trend where private equity firms take over hospitals, cut services, endanger patients, all to reap huge profits for investors. Murphy discussed his recent report, A Dangerous Prospect: How Private Equity Decimated Connecticut Hospitals, detailing how a private equity firm caused devastating reductions in the quality and affordability of care in three Connecticut hospitals.

Murphy laid out private equity's destructive impact on patient outcomes: "Patients at private equity-owned hospitals are more likely to get an infection, they're more likely to experience a fall, they're more likely to have a variety of adverse events following a procedure. There's another study of private equity-owned nursing homes, and this one is just damning. It shows that if you're a patient at a private equity-owned nursing home, you will have an 11% higher mortality rate than those that are not owned by private equity. So those are the stakes here. This is literally a matter of life and death."

Murphy explained how decisions based on corporate greed, not quality of care, have destroyed the health care system: "The motivation is not to care for people. It's frankly, to deny people care, to drive people crazy trying to get reimbursement for care… We've become so desensitized to corporate greed in our health care system that we forget it was ever different. Young people today have only lived in this system. They know it's fundamentally broken. They can feel it when they go to a hospital that's suddenly short on supplies, like these three hospitals in Connecticut, or when they go to an urgent care facility and they have to wait for three hours, or when they're booking an appointment online with the first available doctor instead of a primary care physician that they have a relationship with-that they know and trust. There's a soullessness. There's an emptiness to our current health care system now that the driving force isn't taking care of people - it's making a tiny number of people a disgusting amount of money."

Murphy continued: "It's important to remember that it wasn't always like this… We were looking back at the initial criteria that the American Hospital Association used to approve health insurance plans, and it's just wild. This was a world that we lived in for so long. The criteria was that the plan had to be not-for-profit. The plan had to be designed to improve the public welfare. It had to cover hospital charges, and it had to allow free choice of physicians. Again, that's just a world that doesn't exist today, but it wasn't so long ago when hospitals wouldn't deal with an insurer unless the plan was designed to improve public welfare."

Murphy emphasized how Connecticut is now choosing a different path: "I'm proud to report that, in part because of our advocacy, these three hospitals are now in the process of being turned over to nonprofit entities, instead of cycling through another private equity firm. So to me, this is simple. We act as if we have to just accept that the motivating factor in our healthcare system should be rapacious greed instead of taking care of people, but why should we accept this? Why do we accept that our hospitals and our nursing homes are just vehicles for the enrichment of the 0.01% crowd? Why should our grandparents be pawns in a game designed to let private equity executives compete with each other in a game of who has the biggest private jet? That's dystopian, that's disgusting, and it's just our choice as a society and as a government as to whether we should allow it."

Murphy called on colleagues in both parties to take action to prevent further harm to patients: "We've got to be willing to tell the stories of what happens to community hospitals and nursing homes and other health care centers that are bought by private equity and all the immoral outcomes that result. And political leaders on both sides of the aisle need to have the courage to stand up against these deals when they're proposed for their communities… This is a place where you could see Republicans and Democrats stepping up and saying, "No, enough is enough. We are not going to let happen to our hospitals what happened to our insurance industry." We believe, based upon the data, that there's just no claim that private equity ownership in our hospitals, in our nursing homes, leads to better care."