[acb-hsp] How Vulture Capitalism Endangers Nation's Elderly
paltschul at centurytel.net
Wed Jan 18 14:52:12 EST 2012
How Vulture Capitalism Endangers America's Elderly
GOP presidential hopefuls -- most notably Newt Gingrich and
Rick Perry -- have been attempting to derail Golden Boy Mitt
Romney's campaign momentum by attacking his background as a
venture capitalist, deriding as "vulture capitalism" the practice
of acquiring businesses through leveraged buyouts and attempting
to increase their value through cutting costs, laying off workers
and stripping out assets. For many staunch, laissez-faire loving
Republicans these criticisms have been deemed an attack on
capitalism itself. The free market is all about competition,
after all, and when a company ceases to be effectively
competitive the choice is to either shut the doors and call it
quits or do what needs to be done to right the ship. For a
self-professed economic conservative to smear a man's
professional reputation by painting him as an unscrupulous
"vulture" is at best a political cheap shot, at worse an act of
ideological blasphemy. Or is it?
Though few people are aware of it, the nursing home industry is
a classic example of a sector where "vulture capitalism" is
destroying lives. With the graying of America, Wall Street is
finding the nursing home sector to be increasingly attractive.
Private equity firms are displacing public corporations and
mom-and-pop operators and moving into the ownership and operation
of nursing homes. This trend has proven disastrous for nursing
home residents, resulting in poorer quality care and increased
violations of health and safety regulations.
These private equity investors cum "health care providers" seek
to improve profitability by cutting costs, most notably labor
costs. And since nursing staff represents the biggest expense in
a nursing home's budget, that's where most of the cuts come from.
The obvious problem with this tactic is that the nursing home
industry is a service intensive industry. You can't turn and
reposition immobile residents without staff, and if you don't
turn and reposition these folks every two hours they develop
festering bed sores. You can't feed or provide fluids to
dependent residents without adequate staff, and when you don't
they become malnourished and dehydrated. You can't provide
incontinence care without staff, and when you don't residents
develop painful and embarrassing infections. The evidence shows
an increase in all of these problems with the advent of private
equity capital in the nursing home industry.
There is nothing wrong with making a profit of course, and
there's nothing inherently wrong about trying to make a profit in
the eldercare industry. But it is wrong to secure those profits
at the expense of the clientele. Part of being a responsible
corporate citizen, after all, is following through on your
professional commitments in a conscientious and ethical manner.
This is particularly important when your "business" consists of
providing an environment of care, comfort, and dignity for men
and women in the twilight of life.
The irony is that few people have been enablers of these
practices more than Gingrich and Perry, who under the guise of
"tort reform," have fostered policies that ensure that corporate
predators are not required to fully account for their wrongdoing.
Governor Perry's Texas is home to some of the nation's more
draconian tort reform measures and Gingrich has long been a
champion of similar policies, though recently he's attempted to
distance himself from this position.
But principle doesn't seem to stand in the way of these
fellows. That was then and this is now. Given the bitter
attitude that most Americans feel for Wall Street and Big
Business in the wake of the financial meltdown and subsequent
recession, their calculus seems to be that there is more
political advantage to be gained by demonizing their former
benefactors. That Wall Street has clearly cast its lot with
Romney at this point might also play a role in their decision to
play the populist card despite their Blue Blood roots.
As for those who are quick to label as heretics those
conservatives with the nerve to question the ethics of "vulture
capitalism" it is important to understand that merely calling
into question unethical business practices does not equate to an
attack on the merits of capitalism. Business is no less subject
to the rule of law and ethical scrutiny than any other aspect of
life. To suggest that capitalism is not subject to either law or
ethics invites predatory and destructive practices. Wasn't the
Wall Street meltdown, fueled by the unscrupulous practices of
enterprises like Fannie Mae, Freddie Mac, Lehman Brothers, and
others all the evidence we need of the destruction wrought by
practitioners of "vulture capitalism?" How quickly we forget.
Meanwhile, the practices of predatory capitalists in the
nursing home arena continue to harm our institutionalized
elderly. Who will speak up for them?
Ken Connor is Chairman of the Center for a Just Society.
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