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Private Equity Investment in Healthcare: A Danger to Patient Safety

August 25, 2022  ·  By mark

Private equity investment in healthcare is on the rise, increasingly strengthening its grip in the medical field over the last decade. Annual deal values “have gone from $41.5 billion in 2010 to 119.9 billion in 2019, for a total of $750 billion over the last decade” according to a report released by the American Antitrust Institute and the Petris Center, School Of Public Health at University of California, Berkeley.

For example, Amazon has recently come under fire for its own endeavor into the medical field. The tech giant created Amazon Care as a telehealth services for its employees. Since its inception, the company has signed up other companies “including Hilton and Amazon-owned Whole Foods Market.” In July, Amazon announced plans to acquire health-care start-up One Medical. Amazon Care aims to simplify health care, but former staffers have concerns – The Washington Post

>>> Related resource: How Private Equity-Owned Medical Practices Can Enable Sexual Abuse and Malpractice

Corporate interest in healthcare companies poses a grave risk for an industry which should be focused on the wellbeing of patients—not profits.  Private equity funds “by design, are focused on short-term revenue generation and consolidation and not on the care and long-term well-being of patients. This in turn leads to pressure to prioritize revenue over quality of care, to overburden health care companies with debt, strip their assets, and put them at risk of long-term failure and to engage in anti-competitive and unethical billing practices.”

A real-life Chicagoland example of the danger of private equity investment in healthcare involves DuPage Medical Group [DMG], now known as Duly Health and Care.  In 2017, the pri­vate equi­ty group of Ares Man­age­ment, L.P., which calls itself a “glob­al alter­na­tive asset man­age­ment firm,” invested $1.45 Billion in DuPage Medical Group.  At the time, DuPage Medical Group publicized itself as one of “the largest and most suc­cess­ful inde­pen­dent mul­ti-spe­cial­ty physi­cian groups in Illinois.” When Ares invested in DMG, the physician group had 750 physicians and 120 Chicagoland locations.

A physician group the size of DuPage Medical Group must be closely managed and supervised to ensure proper and safe patient care.  The focus must be on patient safety—not profits.  However, the focus of private equity is always profit. This conflict creates dangers for patients who are kept in dark on private equity’s involvement in their health care.   Management and administration becomes centralized and remote from front-line care facilities, care becomes profit driven instead of compassionate, and cost-cutting through staff reductions becomes the norm.  Patients ultimately become the victims.

Learn More About Sexual Abuse at Medical Practices

Hurley McKenna & Mertz filed suit in 2021 against DuPage Medical Group/Duly on behalf of a a female patient who was sexually abused by obstetrician-gynecologist Vernon Cannon, M.D. during a gynecologic examination at a DMG facility.

According to the lawsuit, DuPage Medical Group owed this patient, “a duty to implement policies and procedures, screen physicians, and supervise physicians so as to prevent sexual battery by gynecologists.”

According to the Complaint, DuPage Medical Group’s own records document multiple reports from patients about Cannon practicing while intoxicated. Despite these reports, the Complaint alleges that DuPage Medical Group did nothing over an 18-month period to investigate them or discipline Dr. Cannon. Research shows that alcohol contributes to approximately fifty percent of all sexual assaults.

The lawsuit alleges that DuPage Medical Group negligently retained Cannon when it knew or should have known he examined patients while under the influence of alcohol and that DuPage Medical Group failed to adequately supervise Dr. Cannon during his interactions with female patients in light of his history.

The case is pending in the Circuit Court of Cook County.  You can read more about the suit against DuPage Medical Group and Dr. Cannon here.

Were You a Victim of Sexual Abuse at DuPage Medical Group or Another Private Equity Owned Healthcare Facility?

Hurley McKenna & Mertz can help. HM&M has the experience and resources necessary to get justice from the large and powerful institutions that too often failed to prevent or stop the abuse. Even if the abuse took place years ago, the law can permit you to seek damages from those institutions.

For a confidential and free consultation about your circumstances, contact us here.



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