St. John of God may follow Caritas Christe Health System in selling out to a private equity hell hound. St. John's, an Australian hospital system, did not deny putting its pathology division on the blocks. Bidders include The Carlyle Group's Healthscope. Australian Business with WSJ reported:
"We estimate a price over $300m could still be about 2 per cent to 3 per cent earnings per share accretive for both Primary and Sonic (Healthscope competitors)," said Citi analyst Alex Smith.The article mentions pathology's high fixed costs, which become higher after a sale due to additional interest, depreciation and amortization costs. This move won't lower health care costs, but it may help Carlyle achieve targeted 30% annual returns.
St. John of God was granted the vision of the infant Jesus. His most famous miracle involved rescuing inmates from a fire in the Grand Hospital at Granada, with John passing through the flames unscathed.
Centuries ago saints walked through the fires of hell saving people. Today, Wall Street bankers and private equity underwriters (PEU's) claim to do God's work. They walk unsinged through fires of raging health care costs, even as they add billions in interest expense, management fees and special dividends. Neither the U.S. or Australian government minds for-profiteering in health care. Their policies encourage its widening.
Safety net hospitals, I mean "tax exempt facilities," have a brutal three years until 2014. That's PPACA's PEU pathology. In the meantime For-Profiteers will do their part to drive up health care costs. In contrast to St. John of God, help is not on the way.
