Asset stripping is evil. I think we should have more regulations against asset stripping. How would those regulations be written, though?
In my opinion, as a lay person who reads the news, asset stripping seems to be a way of "hacking the system" - doing a series of things, individually permissible by the rules, to achieve personal gain at the cost of social harm. I think, we should forbid dumping negative externalities on people. But which step is the actual wrong?
I think by asset stripping the parent is including other plays. Private equity buys a company, sells the real-estate to their friends and leases it back to the company on a long term lease. Then after other shenanigans they IPO and dump the company back on the public. It's better than in the old days because they don't fire everyone and sell the assets. They may even make some positive changes, but the company now has to pay rent.
May be we should have more supply, less regulation & more open information on pricing. (in the US you can't get a quote on your medical bill beforehand in many places)
Currently the hospitals are working in an environment where the market forces can't work properly. That's why the prices of the medical services are so expensive. No competition, limited supply, over regulation, incentives between the hospitals and the insurers are bad.
The argument of "it's too important to be for profit" is wrong, because food is "for profit" and it's not perfect, but the market forces the big retailers to work with 2-4% margin. Hospitals aren't like that. For profit hospitals work with 14% average operating profit margin (3-5 times higher) because of the regulated industry.
This is a classical microeconomics problem of supply and demand. Markets are good at that to drive the price down. For people who can't afford it the government may redistribute the taxes from the healthy people to pay for treatment. The cheaper is the treatment, the better it will be for all.
Socialized hospitals have waiting lists while for profit hospitals have health insurance companies denying coverage. The problem is the demand outstrips the supply and you end up with some form of rationing of care, this is not a problem with profit motive.
Please explain what exactly that would change about this situation.
The entire point is most of the surplus from the hospital is being extracted as real estate rent. The hospital itself doesn't need to post a profit in order for the overall scheme to be profitable for the perpetrators.
Furthermore as far as getting into this situation, administrators of a non-profit are just as capable of asset stripping to post good numbers in short term, and self-dealing to enrich themselves long term.
The thing is, asset stripping is how failing companies finance continuing operations.
If you outlaw sale and lease back, businesses and hospitals will fail sooner, but with their real estate intact. At least until they figure out that they could move into a rental and sell their existing facility, but moving facilities is very expensive for hospitals, so they'll probably not be able to afford that.
For hospitals, especially rural hospitals, I think trying to run them for economic gain just doesn't work. They're expensive, they have obligations to provide expensive care without promise of payment in many cases. Municipal hospitals seem to make a lot of sense to me, although the same communities that are having trouble with hospitals failing would likely have trouble paying for a municipal hospital as well.
> For hospitals, especially rural hospitals, I think trying to run them for economic gain just doesn't work.
In current day America it doesn't seem like anything useful is compatible with making money. From the outside, it looks like you've entirely divorced money from common good.
It is possible to make hospitals profitable, but it requires you to take control over what sorts of things you wish to make a profit.
I'm not sure if I believe that story, though. Look at Sears, for example. Yes, they mostly missed the wave on e-commerce, and were on a decline ever since then. But are you really claiming Eddie Lamport didn't do anything wrong that worsened the already bad trajectory?
Asset stripping is fine. If a chain restaurant doesn’t work without its land use being subsidised by incumbency, the land probably has a better use. (Nobody is asset stripping beloved single-location family-owned restaurants).
The problem is hospitals run for profit don’t make sense. The profit motive is the problem. Not how it is pursued.
Who cares how they would be written? They would never get passed. It's called capitalism for a reason - capital calls the shots. Why does nobody understand this?
So you mean that there is just one rule, capital calls the shots. Then why do we even have laws and regulation?
I think that every market needs regulation to work well. Different rules for different markets, but they need regulation to keep participants on relatively equal footing, for example to avoid cartels.
This is the thing I think alot of people dont understand.
Capitalism is not about people and their interests, its about capital, its perfectly willing to sacrifice social good, people's lives, etc. all in pursuit of Capital and its interests.
Until people start to wisen up to this, we will continue to hear stories of organizations doing clearly evil things to serve their bottom line.
The opioid crisis being caused by pharmaceudical companies in America being a clear example of this.
Agree. If this was the movie studios, or the record industry, then this kind of creative destruction would be ok, but we are talking about regulatory arbitrage and financialization leading to a market failure, and in this case it is our health system. Traveling 50-75 miles to the nearest ER will most often just lead to death. This is perhaps the most basic service a modern economy can provide ... third world countries will have better options than many US citizens.
The US spends far more per-capita on healthcare than other OECD nations [1] and has objectively less coverage and worse outcomes [2].
Buying up property then leasing it back is straight from the private equity playbook. It almost always ends badly. And it's driving up the cost of everything. Hospitals, vets, housing, etc.
At some point you have to realize that the only innovation under capitalism is building enclosures and rent-seeking.
Whereas in China, a command economy, they've built 20,000km+ of high speed rail in <20 years and just unveiled a 600kmh maglev train (note: that's faster than commercial aircraft) that will go from beijing to Shangai, over 1000km, in 2.5 hours.
The US government, regardless of party, operates to transfer wealth from the young and poor to the old and wealthy, and the "old" part is on shaky ground. And it can't go on like this.
I think by 2100 we'll see a collapse of this system, the kind that ends in land reform, guillotines, nationalization and sovereign debt default.
>Whereas in China, a command economy, they've built 20,000km+ of high speed rail in <20 years and just unveiled a 600kmh maglev train (note: that's faster than commercial aircraft) that will go from beijing to Shangai, over 1000km, in 2.5 hours.
It's less because China is a command economy (ie. the government determines the allocation of capital), and more to do with the fact that it's an authoritarian state where the local population and interest groups basically has zero ability to object/block construction projects.
There are plenty of examples of invidiuals who do object. However, unlike in other countries, developers and the government are free to bully them and ruin their lives for daring not to sell their homes. Plenty of examples of houses in the middle of highways (one famously literally in the middle of the road), packed between huge flats, in the middle of active construction sites, placed on top of huge hills or pits when land height is altered, and other places where you'd never want to live.
That said, the Chinese state is also doing this by spending a lot of money on infrastructure. This isn't unlike what the west did when everybody got electricity, phone lines, clean water, sewers, heating, and things like bridges and infrastructure. Of course the government helped rollout of rail infrastructure in populated areas by creating the necessary laws and ordinances (less populated land was still cheap enough that companies could just buy land). That approach worked fine, until populations grew so there was less cheap land and property became a method of investment that drove up prices to a ridiculous degree.
My country's rail network has been reduced to the essentials, after several mergers and services that became unprofitable were shut down (despite them working fine as independent companies). Building new rail now takes decades of negotiations instead of a few years of laying tracks, if funding can even be secured, as politicians seem to hate the idea of investing in public transport when we could add Just One More Land. The entire system has been clogged.
The authoritarian system is one way to work around the problems of modern high-density society, but it's not necessarily the only way. The trouble lies in convincing enough people to accept the downsides, and to stop the greedy fraudsters from bleeding any development plan dry in any way they can.
Why do we spend so much and still have such a busted system? Is it that the money goes towards price gouged services, or Americans have bad preventative health practices? Other things? Likely a combination of a lot?
We spend so much because mostly we're spending other people's money, and no party is really in a position where cost control is possible and beneficial.
The patient might prefer to pay less out of pocket, but they often aren't presented with cost information until a month after the service. Often nobody can tell you how much something costs before hand. Anyway, there is incentive to get more covered care, because insurance is paying for most of it.
Insurance companies are generally limited on administrative costs and profit to a % of medical costs. More costs allowd them to pay higher executive salaries and profits. Insurance companies do have a cost control function, but the incentive isn't there to do it well.
Individual practitioners and medicial facilities and facility groups have incentive to bill more things.
People paying for the insurance, which is often employers, do have cost control incentives, but things are pretty murky at that level.
Somewhere in all of those costs, we're paying for an army of billing specialists and an army of claims handlers.
Throwing out insurance and moving to billing at time of service would be terrible for access but it would make cost control a lot more possible. Single payer systems can make cost control possible too, if the single payer system is able to do analysis and effectively set policies to avoid things that are not cost effective, and curtail billing abuses... Of course, nobody likes it when cost control says the thing they want to do isn't cost effective and they can't do it.
Yes, from what I have read it is that Americans pay for more for doctors, drugs, and services. And when attempts are made to begin to curtail these costs, the lobbyists swoop in and buy off our politicians.
We have a shitty universal healthcare system where the destitute get unlimited healthcare but only at emergency rooms, which is both extremely expensive and not that effective at making them healthy compared to e.g. regular primary care visits with free insulin and antipsychotics. The unpaid emergency rooms bills bring the hospital down and they have to take it out on the middle 50%
Americans also consume a lot more healthcare than others. Yes, if you are poor and uninsured in US it sucks. But americans go way more to the doctor and wait less in time than in Europe.
What I just find incredibly hard to believe is that we are accepting comments about inequality and profiteering "in cooperation" with Al-Jazeera. Seriously? From the Qatari government?
Does it really need to be stated that this is propaganda? Really? Are we to believe that these people are worried about the rights of poor patients in the US?
Readit News
In my opinion, as a lay person who reads the news, asset stripping seems to be a way of "hacking the system" - doing a series of things, individually permissible by the rules, to achieve personal gain at the cost of social harm. I think, we should forbid dumping negative externalities on people. But which step is the actual wrong?
Currently the hospitals are working in an environment where the market forces can't work properly. That's why the prices of the medical services are so expensive. No competition, limited supply, over regulation, incentives between the hospitals and the insurers are bad.
The argument of "it's too important to be for profit" is wrong, because food is "for profit" and it's not perfect, but the market forces the big retailers to work with 2-4% margin. Hospitals aren't like that. For profit hospitals work with 14% average operating profit margin (3-5 times higher) because of the regulated industry.
This is a classical microeconomics problem of supply and demand. Markets are good at that to drive the price down. For people who can't afford it the government may redistribute the taxes from the healthy people to pay for treatment. The cheaper is the treatment, the better it will be for all.
https://www.kff.org/health-costs/issue-brief/hospital-margin...
The entire point is most of the surplus from the hospital is being extracted as real estate rent. The hospital itself doesn't need to post a profit in order for the overall scheme to be profitable for the perpetrators.
Furthermore as far as getting into this situation, administrators of a non-profit are just as capable of asset stripping to post good numbers in short term, and self-dealing to enrich themselves long term.
If you outlaw sale and lease back, businesses and hospitals will fail sooner, but with their real estate intact. At least until they figure out that they could move into a rental and sell their existing facility, but moving facilities is very expensive for hospitals, so they'll probably not be able to afford that.
For hospitals, especially rural hospitals, I think trying to run them for economic gain just doesn't work. They're expensive, they have obligations to provide expensive care without promise of payment in many cases. Municipal hospitals seem to make a lot of sense to me, although the same communities that are having trouble with hospitals failing would likely have trouble paying for a municipal hospital as well.
In current day America it doesn't seem like anything useful is compatible with making money. From the outside, it looks like you've entirely divorced money from common good.
It is possible to make hospitals profitable, but it requires you to take control over what sorts of things you wish to make a profit.
The problem is hospitals run for profit don’t make sense. The profit motive is the problem. Not how it is pursued.
Deleted Comment
I think that every market needs regulation to work well. Different rules for different markets, but they need regulation to keep participants on relatively equal footing, for example to avoid cartels.
13 Million people about to lose insurance
and ACA premiums about to double so people will drop that too to buy food/rent
means America is returning to emergency-room as primary care with unpaid massive bills so many, many hospitals will close
We're basically going to ride this broken system into the ground
ie. bridges are never repaired in USA until they completely collapse
Buying up property then leasing it back is straight from the private equity playbook. It almost always ends badly. And it's driving up the cost of everything. Hospitals, vets, housing, etc.
At some point you have to realize that the only innovation under capitalism is building enclosures and rent-seeking.
Whereas in China, a command economy, they've built 20,000km+ of high speed rail in <20 years and just unveiled a 600kmh maglev train (note: that's faster than commercial aircraft) that will go from beijing to Shangai, over 1000km, in 2.5 hours.
The US government, regardless of party, operates to transfer wealth from the young and poor to the old and wealthy, and the "old" part is on shaky ground. And it can't go on like this.
I think by 2100 we'll see a collapse of this system, the kind that ends in land reform, guillotines, nationalization and sovereign debt default.
[1]: https://www.healthsystemtracker.org/chart-collection/health-...
[2]: https://www.commonwealthfund.org/publications/issue-briefs/2...
It's less because China is a command economy (ie. the government determines the allocation of capital), and more to do with the fact that it's an authoritarian state where the local population and interest groups basically has zero ability to object/block construction projects.
That said, the Chinese state is also doing this by spending a lot of money on infrastructure. This isn't unlike what the west did when everybody got electricity, phone lines, clean water, sewers, heating, and things like bridges and infrastructure. Of course the government helped rollout of rail infrastructure in populated areas by creating the necessary laws and ordinances (less populated land was still cheap enough that companies could just buy land). That approach worked fine, until populations grew so there was less cheap land and property became a method of investment that drove up prices to a ridiculous degree.
My country's rail network has been reduced to the essentials, after several mergers and services that became unprofitable were shut down (despite them working fine as independent companies). Building new rail now takes decades of negotiations instead of a few years of laying tracks, if funding can even be secured, as politicians seem to hate the idea of investing in public transport when we could add Just One More Land. The entire system has been clogged.
The authoritarian system is one way to work around the problems of modern high-density society, but it's not necessarily the only way. The trouble lies in convincing enough people to accept the downsides, and to stop the greedy fraudsters from bleeding any development plan dry in any way they can.
The patient might prefer to pay less out of pocket, but they often aren't presented with cost information until a month after the service. Often nobody can tell you how much something costs before hand. Anyway, there is incentive to get more covered care, because insurance is paying for most of it.
Insurance companies are generally limited on administrative costs and profit to a % of medical costs. More costs allowd them to pay higher executive salaries and profits. Insurance companies do have a cost control function, but the incentive isn't there to do it well.
Individual practitioners and medicial facilities and facility groups have incentive to bill more things.
People paying for the insurance, which is often employers, do have cost control incentives, but things are pretty murky at that level.
Somewhere in all of those costs, we're paying for an army of billing specialists and an army of claims handlers.
Throwing out insurance and moving to billing at time of service would be terrible for access but it would make cost control a lot more possible. Single payer systems can make cost control possible too, if the single payer system is able to do analysis and effectively set policies to avoid things that are not cost effective, and curtail billing abuses... Of course, nobody likes it when cost control says the thing they want to do isn't cost effective and they can't do it.
Why don't you think of the poor anesthesiologists, hospital admins and insurance execs?
Those yachts and 2nd vacation homes won't buy themselves.
Dead Comment
Does it really need to be stated that this is propaganda? Really? Are we to believe that these people are worried about the rights of poor patients in the US?
https://en.wikipedia.org/wiki/Slavery_in_Qatar