My suspicion is that Private Equity has been funneled in healthcare for two decades intentionally distorting the market behaviors for increased profitability which is why the US has such excessive healthcare costs without any apparent justification.
I do not believe that is the primary driver of costs, but it definitely does not help.
For those who don't know what we're talking about, private equity looks for companies with stable revenue streams such that if you find days to make lots of cuts, the revenue stream will continue for a long time. They then strike an agreement with the current owner to buy the company by having the company take a large loan (actually issue bonds, but it comes to the same thing) to pay off the current owners. That's called a "leveraged buyout" (in finance debt is often called leverage).
They then make those cuts and use the difference between revenue and costs to pay off the debt. They then try to juice up the corpse in various ways to find someone to sell the company to before the long-term impact of the cuts becomes obvious.
This happens in any industry with stable revenue streams. And healthcare has exactly that characteristic.
Has anyone tried to figure out meaningful changes to to laws/regulations to make such private equity raiding unprofitable or attach financial/legal liability for the negative consequences to the people responsible?
It has completely ruined hundreds of industries: driving out all of the experts, wrecking product quality, making companies unresponsive to customers, eliminating good jobs, ....
I do not believe that is the primary driver of costs, but it definitely does not help.
For those who don't know what we're talking about, private equity looks for companies with stable revenue streams such that if you find days to make lots of cuts, the revenue stream will continue for a long time. They then strike an agreement with the current owner to buy the company by having the company take a large loan (actually issue bonds, but it comes to the same thing) to pay off the current owners. That's called a "leveraged buyout" (in finance debt is often called leverage).
They then make those cuts and use the difference between revenue and costs to pay off the debt. They then try to juice up the corpse in various ways to find someone to sell the company to before the long-term impact of the cuts becomes obvious.
This happens in any industry with stable revenue streams. And healthcare has exactly that characteristic.
See https://ourfuture.org/20120913/sick-money-how-mitt-romneys-b... for an article on this exact phenomena.