UVA Health System Under Microscope for Greed

University of Virginia Health System CEO Pamela Sutton-Wallace announced she will leave her position for a COO slot with New York Presbyterian Hospital.   UVA received intense scrutiny over its collection practices.  WaPo reported:

Over six years ending in June 2018, the health system and its doctors sued former patients more than 36,000 times for over $106 million, seizing wages and bank accounts, putting liens on property and homes and forcing families into bankruptcy.

It's called aggressive revenue cycle management.  The University Medical Center has to justify its nonprofit status and a challenge would seem in order.

Unpaid medical bills are a leading cause of personal debt and bankruptcy, with hospitals from Memphis to Baltimore criticized for their role in pushing families over the financial edge. But UVA Health System stands out for the scope of its collection efforts and how persistently it goes after payment, pursuing poor as well as middle-class patients for almost all they’re worth, according to court records, hospital documents and interviews with hospital officials and dozens of patients.

Early in her career at Duke University Sutton-Wallace said:

"I am creating systems where I am having an impact on the communities that I serve."

For some served by UVA Health System the impact has been traumatic and horrific. It's not clear if collections were included in the measures determining her bonus, but extrinsic motivators could have contributed to the last four years of the study period under CEO Sutton-Wallace.  The CEO has a $750,000 annual salary with bonus potential to reach $1 million.

Greed has infected our healthcare system and it is causing real harm to individuals and families.

PEU Pete for President

The Late Show hosted presidential candidate Pete Buttigieg.  The candidate said:

If you start the clock in the early '80s when I was born, that's about the time that alot of things slowed down or stopped in this country from wage growth for most Americans to progress in alot of issues of equity...

Pete was born in the same decade as many private equity underwriters, which donated significant sums to the Buttigieg campaign.

The greed and leverage boys are betting on Buttigieg.  They will make numerous wagers such that their political influence remains outsized. 

Update 10-22-19:  Another media source noticed Pete's corporate bona fides. 

Update 12-15-20:  President Elect Biden indicated he would nominate Pete Buttigieg for Transportation Secretary.  PEU Infrastructure funds must be excited.

PEU Backed Physician Companies Behind Surprise Medical Billing

KKR's Envision and Blackstone's TeamHealth, huge physician companies, are behind surprise medical bills.   The Hill reported in May:

Patients hate surprise medical bills, but they are very profitable for the private equity owners of companies like EmCare (now called Envision) and TeamHealth. Fixing this problem may be more difficult than the White House imagines.

Legislation to address this significant problem faces stiff opposition.  The Hill reported today:

The surprise billing measure has support from bipartisan committee leaders in both the House and Senate, patient advocates and insurers — and was moving forward quickly before Congress left town for August. It was seen as one of the most promising avenues for lawmakers to target health costs this year.

But those efforts are stalling amid a fierce lobbying blitz and political pressures as the 2020 elections nears.

Doctors groups are running millions of dollars in ads against the effort.

Doctor Patient Unity has spent at least $10 million opposing legislation to reign in surprise medical bills.  The group does not disclose its donors.

TeamHealth's PEU owner Blackstone spent over $12.7 million in soft money (outside spending groups) for the 2018 elections cycle.   Envision's sponsor KKR historically gave more to Republicans, but increased donations to the Blue team during Clinton and Obama's successful Presidential runs.  

Blackstone's Stephen Schwarzman and KKR's Henry Kravis can pick up the phone and reach President Trump and most Congressional representatives.  There is no way the common person is lobbying for surprise medical bills, which only add to America's greatest stressor, money.

If Congress cannot address an opaque healthcare system that allows patients to be gouged then my longtime saying remains true.  Politicians Red and Blue love PEU.

Update 9-11-19:  One meme for not eliminating surprise medical bill gouging has politicians giving empathy to PEU companies that need to pay back their bond/debt obligations.  ""What we've seen (from industry) is, 'First, protect me financially.'"  A Daily Beast story on this issue reveals how widespread the PEU virus is in today's world.

Update 12-2-19:  Blackstone's Team Health said it stopped suing poor people.  It did not say it stopped overcharging those who could pay.

HirePEU

Seeking Alpha reported:

Carlyle Group agrees to take a majority stake in HireVue, a provider of AI-driven talent assessment and video interviewing solutions.

Hirevue's website describes the company:

HireVue is transforming the way companies discover, hire and develop the best talent by combining the power of video, games and AI for better hiring decisions. The HireVue Assessments and Video Interviewing Platform uses a ground-breaking combination of industrial/organizational science and rigorously tested, predictive artificial intelligence to help customers find and engage higher quality talent, faster.

My healthcare employer used artificial intelligence to predict patient decline.  Our experienced nurses laughed at the number produced by the company's complex algorithm.  Our doctors shook their heads over the need to reduce a patient's myriad of disease processes into a single score and pretend it meant more than the eye of a good nurse or the consensus of a healthcare team.  The company never asked our physicians for any kind of input, even though they had decades of experience.

Human Resources morphed into human neglect as virtually every function was contacted out to a vendor.  HR served executives not employees.  Strategic HR existed to implement the will of our new private equity owners.  They fired critical staff to meet financial targets.  Customer service became abysmal.  Nobody cared, not even our well insulated compliance department.

Video, games and AI will do nothing to hire experienced clinicians.  But it may ensure fans of private equity get ranked higher.

I cannot think of a more evil combination, the merging of algorithms with the greed and leverage boys.  Algorithms blew up Wall Street.  I'm sure they and private equity can make any workplace a living hell.

Update 11-11-19:  Google's healthcare partnership has access to millions of health records and plans to use artificial intelligence to "identify diseases and make predictions aimed at improving outcomes and reducing cost."  How about we reduce costs by not spending a penny on healthcare AI?  I don't want an algorithm deciding what treatment I need or can't get.  The public has seen the driver-less car not recognize a jaywalker and Goldman's Apple credit card employ a sexist algorithm without even know the cardholder's gender.  The Boeing 737 Max shows MCAS system programming can be deadly on a mass scale.

PEU Purpose of a Corporation

The Business Roundtable released an overarching purpose of a corporation, intended to soften  the several decade old myth that capitalism solves all societal problems.  Workers experienced income erosion as captains of industry personally took every piece of the growing economic pie.  The statement included language to counter this longtime phenomena.

Three private equity underwriters (PEU) inked their signature, representing The Carlyle Group, Silver Lake and Vista Equity Partners.  The greed and leverage boys symbolize the worst of management and their ilk has exploded in the new millennium.  Many were founded in the 1980's and 90's but their impact has been widely felt under the Presidencies of George W. Bush, Barack H. Obama and Donald J. Trump.

Wall Street, the original greed and leverage boys, is well represented on the Business Roundtable statement, as are the accounting firms that enabled off balance sheet obligations.

Paying taxes was not listed as a corporate responsibility.  Many companies that paid no federal income taxes in 2018 were signatories to the Business Roundtable statement.

I smell a public relations effort to spin corporations as worthy of government bailout money should the economy tank.  I've been wrong before and will be again but my nose is often accurate.

Update 9-1-19:   The last year under a healthcare PEU affiliate punched huge holes in the Business Roundtable's narrative.  Employees were treated badly and customer service significantly eroded. 

Update 9-5-19:   Big Four accounting firms sold their standards to the greed and leverage boys and paid a pittance for bad audits.  808 defective audits turned into a mere 18 enforcement actions

PEU Rahm Says Democrats Fall in Love

Stephen Colbert hosted former private equity underwriter (PEU) Rahm Emanuel on The Late Show.  The pair talked about the Democratic Debates.  Rahm said Republicans fall in line while Democrats fall in love.

PEU Wasserstein Peralla freed Rahm to talk love by paying him $18 million in Emanuel's first Wall Street gig.  Emanuel recently joined former Treasury Secretary and Glass-Steagall destroyer Bob Rubin at Centerview Partners.  Centerview advised many PEUs on buyout deals.

As President Obama's Chief of Staff Rahm catered to the PEU class.  He dined with Carlyle Group co-founder David Rubenstein at the Blue Duck Tavern.  Carlyle was Emanuel's 16th biggest donor for his 2008 Congressional campaign.

Rahm's new employer Centerview advised Carlyle on a number of deals.

Centerview advised Energy Future Holdings, one of the largest PEU failures in history.

Rahm's appearance on The Late Show came after host Stephen Colbert imitated Presidential Candidate Bernie Sanders.

Oddly, the billionaire class is who Rahm Emanuel serves.  That wasn't the topic of Colbert's interview.  It was the subject of guests the evening before.

The pair posted a graphic to highlight their concern:

Complex organizational relationships exist in the PEU world between affiliate and sponsor.  Below is an image from Energy Future Holdings' bankruptcy filing.

Democrats fell in love with money and power under Presidents Bill Clinton and Barack Obama.  Both catered to the PEU class as did Rahm Emanuel.

Press hating Emanuel will have a media platform courtesy of The Atlantic.  Watch for the bear hug and pivot toward what the greed and leverage boys desire.   That's Democratic love in action.  

All in PEU Family

Carlyle Group co-founder David Rubenstein's raised his children to be private equity underwriters (PEU).  Daughter Elle Rubenstein founded Manna Tree Partners, after co-founding Pt Capital with her mother Alice Rogoff Rubenstein.

Elle was 25 when she co-founded Pt Capital.  Sister Alexa works for Declaration Partners, manager of the Rubenstein family fortune.

Manna Tree Partners invests in healthy food companies, often taking a minority stake.  Vital Foods, Manna Tree's first investment, is an ethical producer of eggs and butter.  Bloomberg reported:

“Carlyle by itself is not the kind of firm we would look to,” said Matt O’Hayer, who started Vital Farms in 2007. “Mission is really important to us. Ellie was really focused on good-for-you foods and sustainable agriculture, all the things we are about, and that made a big difference.”

Yet, father and Carlyle Group co-founder David Rubenstein owns 10% of Manna Tree Partners.  Ex-wife and mother of his children Alice Rogoff said all Rubenstein cares about is money.  Also, David Rubenstein expects huge returns on any equity stake.

Rubenstein jokes about missing Facebook and Amazon.  Through Manna Tree he can profit handsomely off plant based food, a target for his daughter's new PEU.

Even though most healthy food founders won't sell to Carlyle, they're willing to sell to Carlyle's daughter. Sounds like a bad movie.

Update 1-4-23:  Ellie was appointed to the Alaska Permanent Fund board in summer 2022.  Chief Investment Officer reported:

“I’m as bearish on private equity as I have ever been in my career,” Marcus Frampton, CIO of the Alaska Permanent Fund (assets: $78 billion), told his board at a recent meeting, per news reports. “We haven’t seen the correction in private equity as we have in public markets.”

He added that PE has become increasingly expensive and that many PE asset valuations were too high and needed adjusting. The fund has been overweight PE, but he plans to reassess that allocation in coming months, perhaps reducing it by four percentage points.

Update 6-9-24:  Board Vice Chair Elle Rubenstein set up meetings between her PEUs and corporation staff.  This is fully expected in our PEU world.  Conflicts be damned.

Update 6-23-24:  The Alaska Permanent Fund board hired a law firm to look into the leak of Elle Rubenstein's e-mails to a political reporter and examine their disconcerting revelations.