New York magazine investigated the impact of private equity ownership on air ambulances. It reported:
In 2010, Bain Capital bought Air Medical Group Holdings for $1 billion, only to sell it five years later for double that amount to KKR, which, in turn, merged the company with yet another air-ambulance provider, American Medical Response, under the name Global Medical Response. (Tracking this shell game can be dizzying. In the three years between Hoechlin’s air-ambulance flight and mine, Guardian Flight merged with REACH Air Medical Services; both are owned by Global Medical Response.) In 2017, American Securities drastically accelerated private equity’s takeover of the air-ambulance industry with its $2.5 billion purchase of Air Methods, the largest domestic provider of air ambulances. (In 2016, during its final year as a publicly traded company, Air Methods posted a $97.9 million profit on $1.17 billion in revenue, and the year before had paid its CEO $2.5 million in direct compensation, including stock options.) That purchase established the industry’s current landscape, in which two private-equity firms, American Securities and KKR, control almost two-thirds of the national market for air ambulances, according to Medicare data.
As private equity tightened its stranglehold on the industry, it jacked up the already-high prices. Between 2008 and 2017, the median price charged by providers for helicopter air ambulances nearly tripled, jumping from $12,500 to $35,900 per flight.
The greed and leverage boys don't care if healthcare is affordable to citizens. They don't want to give up their preferred carried interest taxation. They want more and they want it unceasingly.
Who could reign in these destructive private equity underwriters (PEU)? Congress and state legislators could, but they won't. Politicians Red and Blue love PEU and increasingly, more are one.
Update 4-24-22: Former Clinton Labor Secretary Robert Reich wrote:
The raiders altered the “free market” to allow them to do this. That’s what the super-rich do. There’s no “free market” in nature. The “free market” depends on laws and rules. If you have enough money, you can buy changes in those laws and rules that make you even more money. (You can also get the government to subsidize you....
Reich's former boss aided a fledgling private equity industry during his eight years in office. They had three decades to distort government to their will. Elon Musk likes flaunting regulators in plain sight, a no-no for the greed and leverage boys who operate in the shadows.
Update 4-25-22: Reuters reported KKR will shaft more patients and healthcare workers in the future:
Buyout firm KKR & Co Inc said on Monday it has raised $19 billion from investors for its latest flagship North America private equity fund, its biggest fund ever.
The fund, KKR North America Fund XIII, will make investments in businesses operating in sectors such as financial services, healthcare, retail, industrials, technology, media, and telecommunications, primarily in the United States and Canada.
Update 8-3-24: I recently met a pilot with a PEU owned air ambulance service. He said what's happening in his company was unthinkable ten years ago. PEU degradation of people and service is remarkable in a most disturbing way.
