IIf you are in a vulnerable situation in Britain because of your age, personal circumstances, violent crime or poor health, there is a good chance that someone somewhere – most likely an offshore private equity investor – is making a profit from your health and care.
In the case of elderly people needing care towards the end of their lives, companies backed by private equity funds have been generating significant returns for decades. Our research at the Center for Health and Public Interest shows that Around £1.5 billion is extracted from the care home sector every year in the form of various types of returns for shareholders and investors.
Even during the pandemic, when the care home sector witnessed more than 40,000 Covid-19 related deaths and supported by £2 billion of taxpayer support, a number of private nursing home companies continued to focus on making profits, of which 122 payout dividend payments totaling £120 million during the first year of the pandemic (an increase of 11% on the previous year) – all while many of the staff in those homes worked longer hours and received no additional pay.
At the other end of the age spectrum, thousands of children in care homes, as well as those in foster care, are also treated as a source of income and profit by companies that made large margins of purchasing and providing these services. More than 80% of children’s homes are provided on a for-profit basis, with local authority leaders warning that profits are being made at the expense of young people in care.
People with serious mental health needs also represent an important revenue stream for the companies they own private equity funds And American healthcare companieswhich operates hundreds of inpatient mental health facilities in Britain.
But that is not everything. As our joint research with the Guardian has found, more than half of the people seen in the NHS-funded Sexual Assault Referral Centers (SARCs) are treated by two companies owned by private equity investors, with Just under a third of the total NHS SARC’s budget now goes to these companies. These are services for people who have been raped or sexually abused, including children. The centers help thousands of victims each year by providing psychological and medical services and collecting forensic evidence for criminal prosecutions.
Again, the returns such companies generate are very nice. In the case of the only company for which financial data is available, we found that it had paid a dividend worth £8.7 million over two years, from an income of £45 million it had generated from providing both SARCS as healthcare to people in the region. guardianship and safe housing. In 2021, the amount of dividends paid exceeded the amount of pre-tax profits the company earned in that year.
The lack of democratic input into the decision to outsource such services is striking – for example, it is difficult to think of a time when a minister proposed privatizing care for victims of sexual violence. Also, the three main political parties that have formed governments over the past two decades have made no manifest commitments to enable investors to generate unlimited profits from children’s homes, mental health institutions or care homes for the elderly.
Much of this outsourcing has taken place in silence, often euphemistically described as ‘public sector reform’, with those receiving the services often least able to voice their concerns. Furthermore, there has been no public debate about the types of companies that should be able to operate such essential services.
While some MPs are opposed to the possibility that the Spectator and the Telegraph could soon be owned by a foreign government, none of them seem concerned about the fact that some of our major healthcare providers are now wholly or partly owned by the sovereign wealth funds of the Chinese Communist Party (in the case of the private cancer care provider). GenesisCarewhich has a growing presence in Britain) or the United Arab Emirates (in the case of Circle, the largest operator of private hospitals in England). This is in addition to the numerous companies operating health and social care services in Britain owners are registered in offshore tax havens.
The mantra that has been used from the Blair government onwards to justify private sector involvement in the delivery of health and social care is:what matters is what works”: it does not matter who provides care, it is the quality of care that counts.
But a recent study published in the Lancet found that transferring ownership of state-owned hospitals to the for-profit sector almost never had a positive effect on the quality of care, and that any reduction in costs came at the expense of quality of care. a paper in the BMJ found that private equity ownership increased costs for those paying for care, with “mixed to deleterious effects” on quality. a American Review of deaths in nursing homes for the elderly saw a 10% increase in mortality after the home was acquired by a private equity-backed company.
Now that we know that there are no health and care services in Britain that are off limits to private equity investors, nor any limits on the amount of profit they can make, it is time for the National Audit Office and other parliamentary committees to work and Find out exactly where the millions of pounds pumped into these services actually end up, and how the high returns from these companies impact people who find themselves in some of the toughest situations imaginable.