Saturday, November 26, 2022

Former Medicare Chiefs' PEU Positions

America's healthcare non-system is stressed and one destructive force is greed.  Private equity underwriters (PEU) targeted healthcare over the last few decades.  Policy makers have not reigned in the PEU boys.   

Consider the Center for Medicare/Medicaid Services (CMS), formerly known as the Health Care Financing Administration (HCFA).  Many Medicare Chiefs went on to PEU positions.  

Tom Scully -- Welsh, Carson, Anderson and Stowe

Nancy-Ann DeParle -- Consonance Capital Partners

Andy Slavitt -- Town Hall Ventures

Marilyn Tavenner -- Serves on Board of WCAS and Apollo affiliates, as well as an SPAC with Tom Scully and Jeb Bush

And there's more:

TPG Capital employed two Medicare Chiefs, Seema Verma and Leonard Schaeffer.  Both have multiple PEU positions on their resume. 

Medicare Direct Contracting stands to funnel more money to the greed and leverage boys.  Over fifty lawmakers wrote a letter in opposition to the program.

Medicare Direct Contracting will hand Traditional Medicare to Wall Street investors, without input from seniors, doctors, or even Congress.  

Most of the 53 Direct Contracting Entities are owned and controlled by investors, including private equity firms, Wall Street investors, and large private payers.

DCEs spend as low as 60 percent of their budget on patient care, allowing them to keep 40 percent of revenues for profit. Meanwhile, Traditional Medicare spends 98 percent of its budget on patient care.

The current Medicare Chief is the former Managing Director of Manatt Health, where she consulted on health care financing issues from 2016 to her appointment in 2021.  This information is not included in her Medicare bio, however you can download a large picture of her. It remains to be seen which PEU hires her after her "public service."  I expect the competition to be fierce.

Politicians Red and Blue cater to PEU and that's why healthcare greed remains unchecked.  America is poorly led by people serving the richest and greediest amongst us.

Update 12-3-22:  Private equity is destroying U.S. healthcare and has been for a parasite for decades. 

“PE firms are gobbling up physician and dental practices; homecare and hospital agencies; mental health, substance abuse, eating disorder, and autism services; urgent care facilities; and emergency medical transportation.”

And former Medicare Chiefs are leading the overcharge.

“Financial engineers… raise large amounts of money and borrow even more to buy firms and loot them. These kinds of private equity barons aren’t healthcare specialists who help finance useful health products and services, they do cookie-cutter deals targeting firms/practices/hospitals they believe have market power to raise prices, who can lay off workers or sell assets, and/or have some sort of legal loophole advantage. 

Often, they will destroy the underlying business. The giants of the industry, from Blackstone to Apollo to Bain, are the children of 1980s junk bond king and fraudster Michael Milken. They are essentially super-sized mobsters.”

Update 12-7-22:   Carlyle Group co-founder David Rubenstein said last week

Right now, at Carlyle, an enormous percentage of our investments go into healthcare, not only in the US, but also around the world. It is one of the fastest-growing and likely most stable areas of economic growth. When I worked in the White House in the late 1970s, 7% to 8% of US GDP was in healthcare. Today, it’s roughly 20%.

The profit curve is being bent in the direction of the greed and leverage boys.   

Update 8-28-23:  Scully's legacy is obscene pharmaceutical price increases.