How can this end well, as value is stripped from hospitals to pay huge debt, consulting fees, and huge bonuses to hospital administrators?
If you are interested in following Layoffs around the country, this site lists them daily:
The HOSTESS layoffs prompted a check to see what else is going on in Layoff Land.
Today, there are a host of hospitals announcing layoffs. Hospitals? Layoffs? What's with that. Here's the list for this one snapshot:
Look at the list of hospital LAYOFFS for this one report.
Carney Hospital - Layoffs Expected SoonWell, lo and behold, Private Equity Firms like Ceberus are investing in hospitals. This won't end well if the Working Model for Private Equity firm investments remains the same. Matt Taibbi does a great job explaining exactly how they work:
St. Luke's Cornwall Hospital - 40 Positions
Lawrence & Memorial Hospital - 22
Glens Falls Hospital NY - 29
Crouse Hospital Syracuse NY - 70 Jobs
Update: the Lower Bucks Hospital - 30Wake Forest Baptist Medical NC - 950 Positions by June 2013
Yakima Regional Medical Center Washington - 10+
CVPH Medical Center - 17 Pink Slips
Emanuel Medical Center - 24
Nebraska Medical Center - 38
Greed and Debt: The True Story of Mitt Romney and Bain Capital
In short, Private Equity firms put up a small amount of money, borrow a large amount of money, buy an entity, pay the entity's Executives VERY well, and look for ways to "trim the fat" to make the entity more profitable which often fails because of the huge debt the entity is forced to take on, which is used to pay huge Salaries/Bennies to the entities upper management and consulting fees to the Private Equity firm. It's an easy set up for layoffs, wage reductions, cut backs in hours, short cuts, and ultimately bankruptcy and lost pensions, all of which Matt explains perfectly.
Are hospitals, which people depend on to SAVE THEIR LIVES, an appropriate venue for Private Equity firms? The casual observer would most likely say no, however, no one on the State levels are objecting.
Imagine my surprise when I looked into the first hospital layoff to find that former VP Dan Quayle's Cerberus owns it.
Layoffs loom at Carney Hospital
Carney Hospital is part of the Steward Health Care System, which includes Quincy Medical Center, Merrimack Valley Hospital and Norwood Hospital. Steward, affiliated with Cerberus Capital Management in New York, acquired Carney in 2010 as part of its purchase of the Caritas Christi Health Care hospitals.Odd choice of a name, btw. Cerberus is a three headed dog that guards the gates of hell to keep anyone from leaving. Not a warm, fuzzy name by any means.
Heaven forbid we have an epidemic. Hospitals are contracting while the population is expanding, especially the elderly.
A little more digging and the following helps explain this disturbing trend.
