 in the school wave, you know, this topic. Hi, everybody. Welcome to the Noontime Lecture Conference. This morning slash early afternoon, I am pleased to introduce Colleen Grogan, PhD. She is the Deborah R. and Edgar D. Janata Professor at the University of Chicago and the Deputy Dean of Curriculum in the Crown Family School. Dr. Grogan's new book, August 2023, with Oxford University Press is entitled Grow and Hide, The History of America's Healthcare State, reveals the true extent of public financing behind a system which is intentionally and repeatedly presented as predominantly private. She documents the consequences of grow and hide fragmentation and lack of health care planning, a lack of health care planning, profiteering, and the rise of capital markets in health care and extreme inequality. Her new research project focuses on the role of financialization in the US health care system and its implications for health policies and health equity. She is PI and co-investigator, respectively, for two NIH-funded grants to study the impact of Medicaid-managed care coverage policies on access to care and health outcomes for persons with substance use disorder. Welcome from across the street, and thank you for being here, and we're very excited to hear your talk. The Dr. Grogan. Great, thank you. Everyone can hear me OK? Super. So hopefully, well, for those of you who came to the Davis lecture last fall and heard me speak, maybe you want to have lunch, but this will be. It's not all that different, so just to give you the heads up. I see a couple faces of the crowd. OK, so as my bio kind of indicated, I just had this book come out called Grow and Hide, and this project really emerged from the book I did when I got to chapter 8. I wrote about the rise of kind of the movement of capital markets of the banks becoming very interested in investing in the health care system, starting really in 1965 and kind of did a lot of that historical work to understand what was going on and how government was playing a role in subsidizing it. So this project really grew out of that book, and I just wanted to share some of that with you today. So should I use the clicker? What should I do to have it go forward? There we go. Thank you. So to start, I just want to acknowledge some co-authors I have in this work. I'm going to share a little bit from a publication that was just published in the New England Journal of Medicine with Joe Bush, who's here in the public health sciences department at University of Chicago, and Victor Roy, who's a post-doctoral fellow MD, PhD, and at Yale University. And then my other colleague, Maryam Lagasin, she and I have really been focusing on this larger project trying to understand how financialization of health has moved into the political system and how that impacts our shaping of health policy through health politics. So I want to start with this article and just share with you our main kind of what was our what why did we write this article? What were we trying to do? So we called it the Calling it the Financialization of Health. And one of the main points we're trying to get across in this article is, I'm sure all of you in the room have been probably reading a lot, because it's been very much in the popular press, in the media, in newspaper articles, Congress is holding hearings, focused primarily on the role of private equity in health care. And so that's very important. And I'll talk about that a tiny bit and more when I get to the politics. But we wanted to write a piece that says it's more than just private equity. There's financialization throughout the system. So you'll see that in the article, we kind of break it down to there are financial actors and it's not just private equity, but from the financial industry, there's hedge funds, venture capital, REITs, which are real estate investment trusts, playing a really significant role. So lots of different financial instruments. It's not just private equity. So if we only kind of zero-leaf focus on that, we're gonna miss some other important dynamics at play. But we have that, we have financialization of health care entities themselves, and then the financial sector, how it impacts people on the ground. And we are kind of arguing that it's beginning to act like a social determinant of health, the impact of the finance. So just to get into each of those levels a little bit, when we focus on the role of the financial industry, there's direct acquisition by financial actors, that's kind of really thinking about private equity, right? There's a lot of concern about how they leverage, they acquire companies, they leverage, they do that through significant leveraging of debt. And that has the way in which their time, their short-time horizons to make, to increase value significantly, and then exit out of the system raises concerns about what they're doing to the structure of companies and the management of companies in that very short-time horizon. So just in the past decade, and I'm sure many of you have already heard these statistics, private equity firms have completed more than 8,000 transactions or what are also called deals involving health care entities, estimating nearly a trillion dollars. So the amount of money in these deals is really, really significant. But again, it's more than just private equity. So I mentioned real estate investment trusts, they acquire health care properties and lease the real estate back to the health care facilities. So sometimes you'll have private equity, acquire a firm, and then use what's called the acronym READS, they're actually more interested in the real estate that that company is on than they are in the company itself, right? And so I think a really good example of this was the acquisition of Panama Hospital that again, many of you might have read about because it got a lot of press in Philadelphia, that there was really significant the real estate in central Philadelphia that Panama Hospital sat on is very valuable. And so this was a good opportunity to make a lot of money just on the real estate itself. And so what's important about that is the company before it was acquired actually owned the real estate, owned the facility after it's acquired by PE, it now has to lease back the, it's real estate. That's one of the major mechanisms that PE will use. And then we also have venture capitalists, which most people think of venture capitalists as having a really good impact on the healthcare system in terms of innovation. And I'm not gonna talk about that today. I think there might be some evidence for that. I think there's not a whole lot of good evidence as to whether the amount of capital spent by VC is really leading to significant innovation. But the main thing to think about with venture capital is that it starts small startup companies on a kind of capital trajectory. So usually what a small startup will want to do is to get VC money, but then eventually be bought by a private equity firm. And so it's part of a larger capital trajectory that should be thought of in the system as perhaps there's innovation to begin with, but if it's acquired by private equity, then what's happening to what we think of initially as disruption or innovation, is that still allowed to really take off? Okay, and then the other thing that's really important are the people giving private equity, not the people, but the institutions giving private equity so much money. So what's behind all this? Most of the investment into private equity or hedge funds is coming from institutional investors and primarily pension funds. So we'll get to more of this a little bit later about the politics, but that really shapes the financial, the kind of invested interests in this whole system, that now you have a lot of state governments that have major pension funds to invest in and lots of them are investing in private equity firms. If they also are taking on responsibility to think about regulating private equity or the financial industry, there's a potential conflict of interest there. Okay, so an important aspect to thinking about the role of the financial industry, especially in healthcare, but more broadly as well, is just that so much of what's happening is very hidden because of the lack of regulations. And so many people have now started to refer to this as sort of a shadow lending market or shadow banking, shadow finance because of the lack of disclosure regulations, lack of transparency. Okay, so that's the financial actors. What do we mean by financialization of healthcare entities? What we mean is that healthcare entities start to behave like financial firms. So if we just take the case of nonprofit hospitals, so that's also kind of important, right, that it's not just for-profit healthcare entities. We see this behavior among many of the large, in fact, academic medical centers that we sit in right here, starting to behave like their own investment firms, right? So a very important finding came out just that was published, I think just last year, if not two years ago, which found that nonprofit hospitals reported, some of the largest hospitals reported significant losses in earnings in their net revenue, and suggested that it was due to a decrease in their operating revenue, in their revenues, right? And so in sort of discussing, even their kind of lobbying to Congress suggested that they had a lot to do with reimbursement and not getting enough in terms of reimbursement payments. But when this author looked into the actual accounting from large nonprofit hospitals, they found that for the largest nonprofits, it was due to investment losses, right? So they're losing money, not because of loss of operating revenue or too large operating expenses, they really lost money because they lost money on their investments. And again, it's pretty large, it was 164% return. Okay, the other way that healthcare entities can behave like financial firms is through share repurchases or what's also been called share buybacks. And our co-author, Victor Roy, has written a lot about this focused on the pharmaceutical company. And so you'll have this phenomenon where companies buy back their shares to increase the value of the remaining shares, right? And so it's kind of an artificial way, you could argue, to increase the value of the company's share. And it does increase, it does provide quite a bit of profit to companies that pursue this strategy. So he found that nearly 70 billion in profit in just 2022 was due to share buyback strategy. And this was nearly an increase of 300% in just a decade. Okay, so just a couple examples of how healthcare entities behave like financial actors themselves. But then how does it filter down to impacting people on the ground, the general public or even patients? So one phenomenon is a dramatic increase in the use of medical credit cards. So healthcare entities, as there's actually, I think many of you have probably heard about this as well since, unfortunately, in the past decade, ironically, after the Affordable Care Act was passed, there's actually been quite a dramatic increase in medical debt. And one response to that has been from many private equity backed firms to offer medical credit cards so that patients can pay back their debt through the use of medical credit cards. They have pretty high interest rates and provide a lot of profit to the companies that offer these medical credit cards. And then, of course, many people in our broader system, the role of finance plays a large role, right? So people are expected to have a credit card, take on debt to purchase a whole number of things in our society. And if that leads to more impoverishment, then that's also kind of related to the social determinants of health. So I'm covering a lot of grounds here, but that's the broad kind of framework of how we wanna think about financialization as through the whole system, not just one actor at this level entering into the healthcare system. Okay, now the other important aspect of this is that the state is actually encouraging a lot of this financialization activity. And so that's really important. So first, through a whole series of deregulations, it allowed the entrance of financial actors into the healthcare system, really starting in quite significantly in the 1980s, but even prior, reliable public financing is really important for financial actors' interests in the healthcare system, right? So one of the major areas of interest in terms of private equity investment in the healthcare sector right now is around Medicare Advantage plans. And many different aspects of investments around Medicare Advantage plans, but that's the hottest ticket right now. And of course, it's Medicare dollars, so it's 100% publicly financed. And then the role of social policy. So just to highlight due regulation, financial markets were deregulated in the 1970s and 80s by 2000, there was an exclusion of complex financial instruments, such as derivatives and credit default swaps. So many of you probably heard about these instruments when we had the financial collapse in 2008, but this all led to allow the financial sector to shift significant capital into private investment vehicles like private equity and hedge funds. So again, the state played a very significant role in bringing about these new instruments. Interest of time, I'm gonna skip ahead. So, and then second, as I talked about, reliable public financing, public funding of the healthcare system has reached 65% of national health expenditures. So if you just think about it logically in so many different areas that the financial industry is investing in the healthcare system, a lot of it beyond Medicare is publicly subsidized dollars. So behavioral health has been a major increase in terms of financial investments and most of the increases in behavioral health are coming from Medicaid coverage because it was so significant to add this coverage under the ACA. Okay, so one thing that many people ask is why would public funding be attractive to private equity? I think many of you might know that Medicare Advantage payments are actually quite high. They're very generous. I had a graph unfortunately that I should have put in these slides that shows sort of the margin from Medicare Advantage plans compared to other private sector plans and Medicaid managed care plans. And the margins are quite a bit higher on the Medicare Advantage plans. So even though we think of public reimbursement as being low, especially like from the hospital's perspective, we want to go after those private insurance dollars. It really depends on what aspect of the healthcare industry you're investing in, whether those public dollars are low or not. But there's also something beyond just the absolute amount of the reimbursement, the reliability of public financing is very important. So the fact that Medicaid and Medicare are entitlement programs, that makes it much more easy to think about a reliable return on investment if you first do your due diligence to see can you make money on Medicaid dollars? If you know you can make money, then even though state payments can be unreliable, knowing that the funding will be there, I think is much more reliable on the public side than the private side. Okay, and then just part of the lack of cohesive social welfare net adds to why medical debt is rising so much. I'm gonna move ahead here to move on to the second part of the talk, which is thinking about if we have this financialization of health and it's moving through all these three levels that I talked about, right? How does that then impact health politics or our structure of health policy? And in political science, there's this phenomenon called what scholars call policy feedback effects. And the idea is pretty simple that when you create state policy, that has an influence on, it gives money to particular stakeholders, which then have an invested interest in getting involved in the political system to further shape that policy, right? So we have, as I said, state policies that have impacted financialization in the first place. We now have the financial industry, healthcare entities and other actors that I'll talk about that have been kind of activated from this encouragement of financialization. And so now they have a real invested interest in helping to continue to shape healthcare policy going forward. So that brings me to how financialization of health has produced this phenomenon of financialization of health politics. Okay, so there's six main factors that I wanna discuss that I think really describe the financialization of health politics. So I'll start with ownership, opacity. And so one, I kind of already talked about this a little bit that there's just a lack of government regulation around private sector. And here I'm particularly thinking about private equity, but it applies to hedge funds as well. There's just very little regulation to make a number of these deals and transactions transparent, right? And so it makes it really hard to, it makes it hard for individuals to know what's happening, but it makes it hard, even if you want to understand what's happening, researchers are really challenged to even just study what's the impact of financialization on health. So I think nursing homes are a good example of this where how lack of transparency has an impact on the politics. So nursing homes was one of the first sectors of the healthcare system that private equity was interested in investing in and it really started in 2000. There was started to be significant investment first in nursing homes. And so by 2007, there was actually a hearing in Congress on PE owned or PE backed nursing homes and concerns about quality of care because there were a number of newspaper exposays, but also qualitative researchers studying what was happening in PE backed nursing homes and raising concerns about quality. So they held a hearing and private equity argued the PE backed nursing homes argued that yes, they sort of acknowledged there are bad apples, but this doesn't describe everybody, right? That there's always gonna be a few bad apples. Well, if you don't have any quantitative data to show that it is a systemic problem, then your influence in this hearing is just very minimal, right? And they really did, it was sort of one anecdotal story against another anecdotal story. And part of the reason there weren't any quantitative studies is that there was no data on what was exactly where PE backed entities. So we finally got a good study in 2021 by Gupta et al. Again, many of you might have already heard about this showing that in a 15 year period, I think they started in 2000 to 2010, or two, I think they went into 2015, but it was at least a 10 year period. It was a pretty long period of time, but it didn't come out until 2021. It was important when it came out because it was also in the middle of COVID, there were lots of concerns about quality of care in nursing homes and they were able to show that PE backed nursing homes on average have a higher mortality rate than non-PE backed. And they attributed the higher mortality rate to a common activity in PE backed nursing homes, which is just to have fewer staff per patient ratio. And so eventually now Congress has responded to have some regulations around what the staff to patient ratio should look like. But what's important about this is, we get a hearing in 2007 and we don't have good evidence until 2021. When Miriam and I have been doing interviews and kind of bring it with private equity firms and other financial actors, we'll bring up the case of the nursing home findings. And they have said to us, that's pretty late in the game. We're not even interested in investing in nursing homes anymore. We're done with that. And so when you think politically, if we can only act until we have good evidence, and the action that people are asking for is transparency, until the harm has already been done, that's problematic. But it adds to, again, the politics because it kind of bolsters the strength of the financial industry, right? So lots has been written about the secrecy and the lack of ability to really understand ownership structure, the complicated ownership structures because of the lack of transparency. So just other people writing about the problem of the shadow industry. So the second phenomenon that I wanna talk about is rhetorical power. And here, on the one hand, this just describes what interest groups do generally, that everybody or lots of groups, whether you're in lobbying Congress or you're lobbying city council, you will use your rhetorical strength, or you will use rhetoric to try to make the best case for what your company or your firm or program does. So that's not surprising. And you see that with private equity, lobbyists for private equity. But I think what makes, what's unique in the healthcare realm is that their promise for providing capital in the healthcare system is that you need capital to create innovation, right? And because our healthcare system is already in such a difficult, there's so many problems in the healthcare system that we're very vulnerable to arguments about disruption, right? Because we know, in fact, we do need disruption. We need to really drastically, for many areas really reform what's happening. And there aren't many good alternatives to private capital. So government does subsidize private capital, but that's also very hidden. So actors in the healthcare system, when we've talked to them through a number of interviews, they will say to us, well, one, for example, a woman worked in private equity, or I'm sorry, worked on health equity, and in particular racial concerns around improving racial health equity. Her whole career, she worked in academic medical center, then went on to work for the Obama administration, worked for a number of consulting firms that were focused on consulting around health equity. And eventually she was approached by a private equity firm. And she said, at first, I thought they just got the wrong number because she was like, why would you be interested in me? But they said, no, no, no, we really want you at the table. And they said, we need that voice at the table because we're really concerned about private equity. And so her response back to me was, this is how we do things in this country. We rely on private capital. And so if I'm gonna be able to make any difference if I can really disrupt what's currently happening, I have to work with private equity, right? So these arguments, these rhetorical arguments around disruption and the lack of alternative arguments, I think is really persuasive in the current structure in the U.S. healthcare system and also plays a role in the politics. The third really important factor is this issue of blame avoidance. So again, and these factors are not mutually exclusive, they're interrelated, right? So for an individual patient, for example, in a PE-backed hospital that might be experiencing concerns about quality of care, they might be really upset about what the hospital is doing and might complain to their congressional member about this particular hospital, but they don't attribute any of the quality concerns to the private equity firm because they have absolutely no idea that it's owned by the private equity firm or if it's a subsidiary of a private equity firm, which oftentimes it is, right? So again, these ownership structures are very opaque and it's very hard for individuals in the system to have any idea whether a financial actor is playing a role in their quality of care. So there's significant blame avoidance, right? So the other way to talk about this is that private equity or the financial industry benefits from blame avoidance, right? That it is not directly blamed for problems that occur. It's the company that they acquire that's blamed. So, I wanna say that these first three factors I just talked about are really successful at keeping private equity off the political agenda in general, though that sounds a little bit, doesn't sound exactly right in this moment because private equity is more on the agenda than it was previously. And we can talk about that more. Elizabeth Warren is working on a bill right now. There's some other actors. They're very concerned about Seward Hospital in Massachusetts. But as of up until this year, it really was very much not on the agenda. One exception is surprise billing. So I wanna talk about that just a little bit as an example. And so what we find under surprise billing is lobbying activity that's very opaque and then the influence of these hidden coalitions. So what do I mean by that? So first, I just wanna get to the main thing that happened with the passage of the no surprises act. So the main thing that happened is, I assume most of you in this room know about surprise billing but I'll just say the kind of basic phenomenon is that an individual, oftentimes it's an insured individual, right? It's almost always an insured individual who thinks that they're using an in-network provider, you know, number of stories about somebody that needed to have a surgery done, made sure that the hospital was in-network, checked it all beforehand, went into surgery. At the time, the surgeon asked for some ER consultants to come in and consult on the surgery. And these consultants came from a private equity physician-emergency-owned company and that was their role, was to consult on surgeries but they charged an out-of-network charge, okay? What hospitals then did was pass that charge onto the patient, so hence the surprise bill. So that's just one example of something that was happening and these bills were not minor, many of them were around $15,000 when you thought everything was covered, right? So hugely egregious because again, the patient also couldn't consent to it. The patient was in the operating room, right? So bipartisan support for doing something about this problem of surprise billing. The reason private equity is important is that all of the surprise billing behavior that was occurring were from private equity backed firms and they created the strategy, right? This kind of ER consulting strategy that was their innovation in the system to make money. And so private equity was very much implicated in surprise billing as they are around the, you know, air ambulance activity that's happening. It's kind of anywhere you see surprise billing, private equity is behind it. So when we pass the no surprises act, what the act does is it says there should be no out-of-network billing that is passed onto the patient. So it eliminated the out-of-network billing to the patient but it did not eliminate out-of-network billing. What became very contentious in the act was if you have an out-of-network bill, who pays it? It's the insurance company that's gonna pay it and what should be the rate, right? And should it be a benchmark price or should it go to arbitration? And what private equity was lobbying for was arbitration and the insurance companies wanted a benchmark rate. What went out was arbitration. So what you have here in the act and many people have said no surprises act is an example of bipartisan work and really helps the American public and Congress can act to do good things for the American public. I don't have such a rosy story about the no surprises act. And the reason is that the root of the problem I think was not addressed, right? So number one, the root of the problem is the behavior of private equity, right? And the lack of transparency. Also, this behavior is still being allowed, right? And when it goes to arbitration, the reason private equity wanted arbitration is that they can lawyer up, which they have and they know they will get a higher rate out of arbitration than the benchmark billing, which is why they were advocating for it and that's what they got. So on almost every measure, I would say private equity in the end won out. So this shows kind of the power of private equity even when there's a bill that goes through Congress that does, that very much relates to their role in the system. They are almost, they are minimally impacted, right? Okay, the active lobbying, the main thing here is that they lobbied quite a bit against surprise billing but used dark money to do the lobbying. So it took quite a while to even figure out who was behind the lobbying efforts against surprise billing. They did lots of lobbying behind a group called physician unity group. And to kind of present a point of view that physicians are against legislation for to eliminate surprise billing. Okay, again, the problem with our lobbying data is it looks at the companies lobbying that are acquired by PE and we still don't have a good sense of PE's role behind the lobbying efforts. So we have some data on private equity or financial firms doing direct lobbying but they are often playing a role behind the PE backed companies within the system and we miss a lot of that. So one example is nursing homes do a lot of lobbying but and health systems of course, in the lobbying efforts that are captured and data sets looking at amounts of money and the amount of lobbying, it doesn't show the role of private equity behind that. So we see increases of PE directly affiliated but I think it's even higher is the point of what this graph is showing. Okay. So the other thing, the fifth factor that I wanna mention that's related to surprise billing is what we're finding from our interviews. And again, this is work in progress. So we're still doing interviews. But one thing that's sort of really struck us in our interviews is we thought we were gonna primarily talk to people in the financial industry to understand what they're doing to reveal some of these practices, to maybe talk to people that have experienced the role of financialization in the healthcare system, have a better sense of that. But what we found through the interviews we've done to date is again, and this relates to the financialization of health is that many, many groups are acting have their own interests in financialization. And so part of the reason, for example, in the surprise billing legislation or the no surprises act that PE was not implicated is that the insurance companies really argued against arbitration but they didn't in their testimony in their arguing, they said nothing about the problem of private equity. And at first we were kind of surprised by that because they were not getting a good deal at all through this process of surprise billing. And it would be easy to implicate private equity in that. But the reason that insurance companies are not interested in implicating private equity is that private equity is also very much involved in acquiring different payer groups, right? And the insurance industries, right? This is a whole large industry, they have many of their own financial arms. So they benefit from many of the regulations that private equity benefits from on the financial industry if you see what I mean, right? So there's no, they have a larger interest in not implicating private equity. So these are the kind of an example of the hidden coalitions that boaster up the role of private equity even though they may not be directly backed by a private equity firm. We've talked to a number of consultancy groups who are doing a lot of the due diligence for private equity. Many of these firms hire people who previously worked in government. They really understand reimbursement policy. They're good data analysts. And so oftentimes private equity firms will acquire a healthcare firm and they don't actually know all the complicated things about the healthcare system or the complications of reimbursement but they hire these consulting firms to do the due diligence. Now consulting firms, these many consulting firms now that are emerging that's their bread and butter. Most of their business is coming from private equity now. And so they also become part of this kind of hidden coalition, they don't want that business to go away. Lawyers as well, there's a huge business coming from PE backed firms that need good lawyers that are willing to work and advocate on the corporatization side on corporate law and financial law. So in most law firms now we have courses on private equity to really understand those regulations. Same with in the Harris School, many of the students end up working for consulting firms that work for private equity. So very, I think a very important phenomenon to understand around the politics. Okay, we do have some advocates that are fighting against private equity or trying to think about more regulations. The private equity stakeholders project is an example of that but we really don't have a whole, we really don't have many others. And so you don't, in a good kind of competitive political system you have countervailing factors, right? You have debate happening. You have people on both sides really trying to bring these issues to the fore. So we as a populist can understand what the implications are and make better decisions. We don't have a whole lot of countervailing actors here in this political system that involves private equity. And I think the reason for that is related to the financialization of health, right? That most of the actors that we would think would be playing a countervailing role are actually kind of becoming financial actors themselves, has an invested interest in the system. Now, I do think young physicians, young provider groups might be a group that's going to emerge as a countervailing force. But it hasn't really been there yet. So I think I'll, this, I'm gonna stop there. I forgot that I sent you the one with the interview data. So I'm gonna stop there and open it up for questions. Say private equity, but how many private equity do you want to talk about? Is it like 100 and is it, are they on one of it as far as what their insides are in the system? Yeah, that's a really good question. So it is a lot of different firms. And I'm sorry that I didn't have a graph on just the kind of basics of how many firms have moved into the system. But if I would have shown you a graph from especially since 2010, the number of firms investing in the healthcare system, it's just gone like this. And the number of deals has increased into every sector, almost every sector of the healthcare system and the amount of money again, adding up to trillions. So it's very significant. Now, what's important though is there was an article, or not an article or report from MedPAC, the Medicare Advisory Commission that oversees the Medicare program. And Congress had asked MedPAC to look into the role of private equity in our healthcare system. And this was just a couple of years ago, I think the report came out in 2022. And in doing research, looking at, there's a data set called Frompitchbook. And they collect data on private equity, what private equity is doing across the economy but have looked also at what's happening in the healthcare system. And so MedPAC used data from Pitchbook which almost everybody does. But the way that Pitchbook gets this data is by scraping the web. Because there's no, again, there's no regulation saying that when private equities acquire a company, they have to report that to the federal government or to some states have some emerging regulations around reporting. But for the most part they don't have, we don't have reporting requirements. So we don't have a database that allows us to understand the complexity of these deals and ownership structures. Now, that's important because it's, it actually is very hard to collect these data. The colleagues I know that do now have data sets like the Gupta et al. It took them a good two years of going through, using Pitchbook data to just connect it to all the different firms in the system over time to then label a firm as PE back, non-PE back. And so what MedPAC found is at any given point in time, they said for hospitals, it's only 2%, or no, hospitals was high risk 5%. They said for nursing homes, it was around 15%. And I think they might have looked at one other physician practice groups and it was, but the point is from their report is that it was very low. And what they said is two things. One, and they said this upfront, the data is really, really bad. And so we don't feel confident at all in the figures we're gonna give you, but this is the only data we have, so we're gonna use it. And if based on these data, the percent involvement is low. So talking to another colleague after this report came out, he said, and reading my paper, he was like, well, you're saying this is a big deal, but MedPAC said it's not a big deal. We don't have to worry about it. And so yes, I think MedPAC suggests to some people that we don't have to worry about it. In the MedPAC report, if you look at that the very end, they also call for transparency and disclosure, because they're not actually confident in their own estimates. And the other problem is that when PE is investing and then it sells, there's no reason to think after the sale that the owners, the behavior of the firm changes, right? Back to not being PE backed, right? That those, that if you've decreased your staff, for example, what nursing homes do, if you have a low patient staff to patient ratio, because what PE implemented when they owned you, now they sell you and you get sold off to some other firm or you're left with a lot of debt, you have no ability if you're left with a lot of debt, which is usually what happens, you have no ability to then increase staff, right? So in these studies that look at PE backed versus non-PE backed, one thing that's also really limited is that we don't know, have you ever had the influence of a financial entity in your firm? And that involvement is much, much higher. And that didn't get captured at all in the MedPAC report. So I think in some sectors, it's actually really hard to find entities that have no financial involvement whatsoever. Now they're gonna be different levels and different engagement, but I think it's important for us to really understand that complexity. And unfortunately, because we don't even, we don't have regulations, it's really hard for us to do. So we're kind of in this catch 22 of like you asked that question, which is really important, I should be able to give you a good answer to it. And it's actually hard to do that right now. So the private equity firms will say, especially Welsh Carlson, for example, who has been investing in healthcare for a long, long time, they'll argue we only invest in high quality. We're a good investor. They're holding conferences showcasing their portfolio companies to say, these are all portfolio companies that truly are doing high quality of care. So just to give you the other side of the argument is that no, they would say we're not monolithic. We're not like these other bad actors. We invest in good things. And so yeah, there is that potential that it's not monolithic. Yeah, yeah, yeah, yeah, that's such a good question. So many people ask a related question that I think you're getting at, which is how is PE different from for profit? If you're a for profit entity, wouldn't you also be maximizing profits and how would private equity owned? They're also just trying to increase value. How could they, if you're already maximizing profits when private equity acquires you, they've kind of maxed out on making profit, right? So the answer to that is because private equity acquires companies by leveraging debt, they, and they work with the C-suite to implement some reforms that some, so there's a number of different arguments here, but one argument is that because they don't have shareholders to speak to, there's very little kind of accountability in terms of some of the organizational reforms that can be made, right? There's not a whole lot of public pushback on what could be really unpopular reforms. So some studies have found, for example, that there are much higher staff layoffs after a company is acquired by PE. And part of the argument for why for profit wouldn't act in this way is that there's still many for profit firms are public and they have shareholders they need to speak to and they have, the data is much more public. And so they have to make a profit within constraints. And the argument is that private equity has very few, doesn't have as many constraints on the ways in which they can make profit or increase value because they're hidden. And in addition, they don't have as many constraints because when they sell after five to seven years, they can leave that portfolio company with a lot of debt. And so many portfolio companies that have been owned private equity backed firms that are then sold have a much higher likelihood of bankruptcy. And so that's when you're kind of like acting in ways that are actually bad for the firm. So most firms don't want to behave in ways that lead them to bankruptcy. But if you're a private equity backed firm, the private equity firm can exit and still make money. Still the founders can make money and their investors can make money even if the firm after it's been sold goes into bankruptcy. So it allows for these things that in a for-profit world with more transparency and without leveraging lots of debt just don't exist. So I think that those are two, there's a couple more important differences, but those are two that I think are really salient that people argue make it different than just for-profit. Long winded answer, but that's, yeah. This bucket is so my thing. I think a lot of us, you know, burn early in the career to have very little responsibility. It's part of our job and that knowledge and influences our day-to-day work doesn't. It's where your thoughts on how to have importance pretty often, but the importance of probably integrating this with medical education, that sub-level or continuing medical education and something and how can we as physicians stand up for what's right in a way that is not available. So I'm assuming that it's our full-time job, but that makes for patience. Yeah, that's such a good question. You know, I remember, you know, I mean, I started teaching in 1994 and I was at Yale at the time and I was in the School of Public Health and Epidemiology and Public Health, which is in the medical school and they had me teach a class to first year medical students and they wanted me to teach kind of intro to, you know, US healthcare system. And I'm sharing this story because it wasn't a required course. It was required to take, but not for grades. So you can imagine, like most of the students were not all that interested. You know, they were taking anatomy and like had lots of other things to worry about. And so I remember thinking about that and have thought about it since, like what's the right, these are really important. And there were a couple of students who did realize like, oh, reimbursement really actually is gonna impact my practice and how I do care or it could impact it. I don't, how do I think about that? But most students had just absolutely no idea that it would and so couldn't internalize the importance of how it would impact their practice. I think by fourth year, they kind of were getting a sense that it is important. But so it's tricky to think about like when should they be introduced to these ideas? When do they have time in the curriculum? Which is like almost no time, right? Like I understand all the complexities of medical education, but especially when you think about, you know, unionization efforts, physician practices being sold to large healthcare systems. I mean, there's more and more of a sense, I think among young people and you know, young to middle career practitioners that they truly are losing control. They don't have a whole lot of autonomy. And that's not just a feeling, I think that's based in fact. And capital, the acquisition is playing a role in that, right? Because there another strategy of private equity and sorry, I'm throwing a lot at you all, but another strategy that's quite common in private equity is to acquire small companies or small physician owned practices and they do what's called kind of a roll up, right? So the way that they can eventually make money is to buy several small companies and roll them together so you get economies of scale, right? It makes a lot of sense. Like each individual practice trying to invest in technology to do billing, right? Doesn't really make sense. It does and from that perspective, like if you roll it up and you have a much larger system then there's economies of scale. So it adds, it's an easy way, this roll up strategy. It's a really easy way for private equity to move into a space, acquire lots of small firms, roll it all together and then sell it and they make a ton of, you can increase value very quickly. But what that means is that process has led to significant consolidation in our healthcare system, right? So that's why antitrust is now really worried about what private equity has been doing and there's a lawsuit in Texas about this very issue of whether the behavior of roll ups has led to significant consolidation and anti-competitive behavior. All that to say that the roll ups are what, individual physicians are now working for large, large systems and systems that are almost becoming acting like monopolies potentially, right? I think they are acting like monopolies. I would agree with the lawsuit that there's a real case for this. So, yes, physicians should have a much better understanding of what's happening and thinking about, okay, if not being owned, if we don't want the infusion of private capital, what's the role of government in thinking about capital investments, right? And that's been kind of lost from our discourse, which is the story about the women working in health equity. It's like, oh, this is how we do things in the US. Well, it doesn't have to be that way. And physicians have a very large influence on patient opinion and on politicians' opinions. So the physicians really did have a coalition to argue for more public investment rather than relying solely on private investment. I think it could have an impact. I'm just curious in the sort of context of planning response, some people say, well, doctors are largely to blame because when large decisions are made to be purchased by private equity, the state generally dig them up. I can't accept that without question. I guess I'm curious, is that a reasonable, is it simple, or is that a burden or not? I think it's reasonable and also shouldn't be quite so broad sweeping, I guess is how I would put it, but I do think especially older physicians that they own the company, they're nearing towards retirement, private equity comes along, they're willing to buy them out. It's understandably an attractive, it's a very attractive offer. Private equity is also very willing to tell them, I have a colleague actually who owned a behavioral health company and he sold to a private equity firm, I had a whole conversation with him about, he said, I talked to them about, I was really worried about my staff, I didn't want them to do things that would hurt my staff or lay off my staff, they promised me they wouldn't do it. And it was just a couple of years ago, so he still doesn't really know what's gonna happen. But it's sort of like it's too good to not take the offer, but so I think you have there, people selling are making a lot of money and private equity knows that they can offer quite a bit of money to the owners and the attractives are look really good, but that's why I said, I think most of the opposition is gonna come from younger physicians that are not gonna still be reaping those benefits. Yeah. Yeah, so for me, the reasons I worries, I mean, I'm kind of worried about the role of the financial industry across the economy, to be honest with you, but the reason I think that we should be particularly concerned in the healthcare sector kind of takes you back to real basics about what we think about healthcare and is it a public good, right? And I do think we have, the arguments for healthcare is not being a competitive market are very, very strong. You know, we've had those arguments since the 1960s, right? From kind of Arrow showing that it's not a regular competitive market. And so we always have government really strongly involved in regulating the healthcare system and in providing financing for the healthcare system. So as I kind of talked about in the slides, one major concern is we're talking about public dollars that are being used and that private equity is making a lot of profit off of public dollars, right? So if we get a lot of innovation for that, then there could be an argument for, well, they're coming in, they're making a major investment by acquiring a firm, they're making some changes. They would argue they're creating more innovation which is why the value of the firm goes up and they're able to sell it for more and exit with a profit. Now they make a profit, but they would say, well, we increase the value. So that's a good to society. Now, I think that's the basic question that we should ask ourselves. Like, did we really get something good from that increase in value as the sale price? It's not necessarily value to society. And if, again, if that money going to the private equity firm is public money and we didn't get value to society, then we should be really concerned and that's what makes healthcare different. I mean, and then obviously the other thing that makes healthcare different is sometimes there's actual harms being done to patients like in the nursing home study that it doesn't get worse than mortality, right? So mortality is higher in PE backed nursing homes that study I think was pretty convincing. So those would be the main reasons. Yeah. Obviously like there's some issues and more and more stuff out. It's like the barrier to entry is part of that term. And there's also not the peak loss of two groups. And then, so I guess, how important do you see like that aspect of the breakdowns of this input aspect? I think it's hugely important. Yeah, I mean, it's just another factor that I think bolsters the case for the FTC in some of their antitrust cases, right? That they are also talking about the problem of non-compete clauses. So yeah, I think it's hugely important. That said, I'm also, I'm very, I don't think relying on antitrust to solve these larger problems that the private capital investments have created in our system is going to be anywhere near sufficient. And I think the reason for that is one, I think, so I just said that we don't have a good competitive marketplace for healthcare in the US. So we have this, in my view, kind of an odd thing with the FTC in the case of healthcare where they intervene when there's anti-competitive behavior to try to create a competitive marketplace. But I don't think we have any good examples of real good competition in healthcare. So it's kind of, to me, it's a little bit of an irony. We also have cross cutting forces in our healthcare system, right? So we have some policies coming from Congress that encourage cooperation, right? And in the ACA was written these incentives for what could be called cooperations to increase continuity of care. What cooperation ended up looking like was integrated vertical integration, right? And the idea was, right, hospitals should be working with physician groups, should be working with behavioral health providers, et cetera, that all sounds great if you have a planned system. But when you don't have a planned system and we have a competitive system, that integrated consolidation means now they're a monopoly and they act like a monopoly by increasing prices, lowering, they have more command over the salaries of these other entities they've now acquired. So it's just like, this is a real problem, I think, with people when we see anti-competitive behavior, we say, oh, we need antitrust, as if that's gonna solve the problem and I'm very skeptical of that. The other thing, just even if we thought FTC could do it, Biden administration has given them more resources, but it's still nothing, just nothing compared to the resources of the private sector. When they lawyer up, they have so many more resources and lawyers to put on the case than the FTC could ever dream of, right? And it's not that we don't have smart people working for the FTC, but it's just hollowed out compared to what lawyers look like on the private side. And just to give you one example of that, I was looking at cases, because I was interested in the role of PE behind some of these FTC and a competitive behavior cases. And from 2010 to 2020, they were behind half of them, but just an example of lawyering up, so there was one case with Pharma, a pharmaceutical company, and the FTC said, you have to go generic. You've reached, you're done with your patent. They argued that they had, their formulary was sufficiently different. So I'm sure many of you have heard about this problem where they changed the formula just slightly and then we'll say they have a new drug that's still under the patent. And FTC was arguing against that and saying, no, you don't truly have a new drug. It's time to open this up to a competitive market. Well, the firm was successful in delaying the, just a number of delay tactics by saying the hearing was in the wrong court. It was a biased court. They were able to lay it for seven years. And so when it finally went to court, there the patent, this new patent was expired. And so the FTC then said, well, okay, it's a new case now and they were fine, but the fine was just minuscule compared to the profits they made in those seven years. So that was just an example of what I mean by lawyering up in the tactics they can use against the FTC. So yeah, I know that was, have we reached time? Yeah, yeah, absolutely. Thank you. Were those some of your fellows? Did you, did you still want to be, did they? Oh, okay.