You won’t believe how private equity is legally stealing your future.
Welcome back to this week’s edition of Cyborg Bytes, where we continue our deep dive into “Private Equity’s Stranglehold on the American Dream.”
Make sure to read that part first if you haven’t already.
It explains how private equity operates.
Boomers now hold over 50% of America’s $140 trillion in wealth, but the wealth transfer to struggling younger generations won’t happen.
There will be nothing left, thanks to private equity.
In this newsletter, I will reveal their sneaky tactics and teach you how to save your family’s assets, saving you potentially hundreds of thousands to millions of dollars.
This is very deep dive, so if you don’t read any other part of this newsletter, scroll to the end for the actionable advice to protect your assets.
Keep every hard-earned dollar out of their thieving grasp.
You Are the Next Resource Frontier
Americans live in one of the wealthiest nations, yet you are not immune to the forms of exploitation historically reserved for regions ravaged by colonialism.
Colonialism, where stronger nations overtook others to exploit their resources and people, enriched the colonizer at the conquered’s expense, marked by economic dominance and cultural erasure.
Today, private equity firms employ similar strategies, viewing you as merely part of a resource-rich territory ripe for extraction.
These firms don’t see you as human beings with rights and dignity; instead, you are assets from which they plan to extract maximum profit.
By promoting lifestyles centered on individual consumption and taking over media, they manipulate societal norms to increase their profits, reshaping your daily life to suit their agenda.
This strategy, reminiscent of the colonial practices of the past, is now implemented on an individual scale, right in your backyard.
Recognize this for what it is: an act of violence, a systematic exploitation of your life’s value.
This isn’t just about extracting money; it’s about controlling and diminishing your life’s quality and potential.
You are caught in a modern form of colonization, treated as a resource to drain in their profit-making machine.
And as a reminder, this is all legal, enabled, and encouraged by the exact same system that allows politicians to trade stocks in industries they regulate.
It’s time to see these actions for what they are—a deliberate strategy to get rich from your money.
Early Life Opportunities
The PeePoo Dynamics private equity firm’s Early Life Strategy Officer, Ben Dover, presents his findings:
“As we develop our profit strategies, we’ve noticed a crucial trend that plays perfectly into our hands: most families need both parents to work because living costs are so high.
This situation forces families into a tough spot where they must find childcare, no matter the cost. Our plan capitalizes on this desperation.
We set our childcare prices just below what one parent earns, making it just affordable enough that quitting a job isn’t a better option. This pricing strategy traps parents.
They have to pay whatever we ask if they want to keep working. We keep our prices high to squeeze out as much profit as possible, ensuring families are backed into a corner with no other options but to pay up.
This approach guarantees us a steady flow of money. It’s a perfect setup: parents see our childcare services as essential, almost like water or electricity, and we get to fill our pockets by exploiting their need to work.
By pressing on this economic pain point, we lock in our profits and strengthen our control in the childcare market, making a fortune by leveraging the hardships of everyday families.”
Private Equity’s Impact on Childcare: Escalating Costs and Quality Concerns
Private equity’s increasing involvement in the childcare sector has significant implications for costs and quality.
Attracted by high demand, government funding, and relatively low start-up costs, private equity firms are acquiring and consolidating childcare centers to maximize profits.
This often involves cost-cutting measures such as reducing staff wages and benefits, increasing child-to-staff ratios, and minimizing investment in facilities.
A critical aspect of private equity’s strategy is the use of debt.
When private equity firms acquire a childcare center, they often load it with significant debt.
Just like what happened to Red Lobster.
This practice, involves Leveraged Buy Outs, or borrowing money to finance the acquisition, with the childcare center itself taking on the debt.
The debt is then used to pay dividends to the private equity firm and its investors, effectively siphoning money out of the business.
This approach prioritizes short-term profits over long-term sustainability and investment in the childcare center’s operations and quality.
The result of these practices is a surge in childcare costs for parents.
With 47% of parents spending up to $18,000 annually and 20% spending over $36,000, childcare costs now surpass the average cost of attending a public state university.
Despite the influx of public funds, such as Vermont’s $125 million annual investment in childcare, there is a significant risk that private equity firms will exploit these funds without improving care quality.
This leads to higher fees without corresponding benefits for families.
The broader economic consequences are severe.
The current market forces parents to spend an average of 24% of their household income on childcare, far exceeding the 7% affordability threshold set by the U.S. Department of Health and Human Services.
Middle Life Opportunities
The PeePoo Dynamics Middle Life Strategy Officer, Sal A. Mander, presents his findings:
“As we refine our profit-maximizing strategies for the middle stages of life, it’s imperative to weigh the business consequences of curing diseases versus managing them.
From a business perspective, curing diseases is counterproductive because a cured patient is a customer lost. Our focus, therefore, shifts toward perpetuating conditions that necessitate ongoing management, thereby securing a steady flow of revenue.
A key tactic involves influencing medical practices and prescriptions. We advocate for treatments that manage symptoms rather than eradicate the disease, thereby extending the lifetime value of each patient.
For instance, instead of offering a cure, we promote the prescription of medications that patients must take indefinitely. This strategy creates a reliable, perpetual market for our pharmaceutical products.
Additionally, we invest in lobbying efforts to maintain lenient American food standards compared to nations with universal healthcare systems. In such countries, the government is motivated to defend its citizens health because healthcare costs are borne by the state.
However, in the U.S., where individuals bear their healthcare costs, there’s no incentive for such regulations. They have no one protecting them. Everyone else just benefits from their sickness so there’s no reason to not… “encourage” their chosen lifestyle.
By ensuring the inclusion of potentially harmful substances in American food products—substances that are often banned in other countries like BHA and BHT—we can heighten the public’s dependence on our healthcare services and products.
This approach is particularly lucrative in the U.S., where the privatized nature of the healthcare system means that illness directly translates to profit. It aligns with our overarching goal of profiting at every life stage.
By ensuring that Americans remain just unhealthy enough to require continuous medical interventions, we foster a cycle of dependency that is economically advantageous for us.
This method of promoting ongoing treatment over cures ensures a constant stream of return customers, thereby driving our profits and solidifying our control over the healthcare market.”
Impact on Healthcare
The role of private equity in healthcare has exploded from $5 billion to over $100 billion annually.
These firms buy hospitals, staff emergency rooms, and implement aggressive cost-cutting measures to maximize profits.
Companies like TeamHealth and Envision are notorious for charging exorbitant fees and issuing surprise medical bills not covered by insurance, leading to significant out-of-pocket costs for patients.
This influx of private equity into healthcare has brought about drastic changes that prioritize profit over patient care, with devastating consequences for the American medical system.
Hospital Acquisitions
Private equity firms frequently buy hospitals and healthcare facilities with the intent to maximize profit quickly.
This approach places enormous financial strain on the facility, often leading to significant cost-cutting measures that directly impact patient care.
- Reduced Staffing: One of the first areas targeted for cuts is staffing. By reducing the number of healthcare workers, private equity firms lower operating costs but severely compromise patient care. Fewer nurses and support staff mean longer wait times, increased workloads for remaining staff, and higher risks of medical errors.
- A study published in the Journal of the American Medical Association found that hospitals acquired by private equity firms saw a 10% reduction in nursing staff, leading to a 9% increase in patient mortality rates within the first year post-acquisition.
- Service Reductions: To further save costs, private equity-owned hospitals might eliminate unprofitable services such as mental health units, emergency rooms in rural areas, or specialized care units. These cuts can leave communities without essential healthcare services, forcing patients to travel long distances for care or forego treatment altogether.
- For instance, the closure of maternity wards in private equity-owned hospitals has been linked to a 20% increase in maternal mortality rates in affected areas.
Fee Maximization
Private equity firms are notorious for exploiting billing practices to maximize revenue.
This often includes charging exorbitant fees for services, which leads to surprise billing practices that devastate patients financially.
- Surprise Medical Bills: Patients who go to an in-network hospital might unknowingly receive care from an out-of-network provider, often employed by private equity-owned firms like TeamHealth or Envision. This can result in unexpected, sky-high medical bills that are not covered by insurance.
- A report from the Kaiser Family Foundation revealed that nearly 40% of insured adults received a surprise medical bill in the past year, with bills often exceeding $1,000 for emergency room visits.
- Exorbitant Fees: These firms charge significantly higher rates for medical services than non-private equity-owned providers.
- For example, private equity-owned emergency departments charge, on average, 297% more than Medicare rates for the same services. This practice contributes to the rising cost of healthcare and places an immense financial burden on patients.
Investment in High-Cost Care
Private equity firms focus on high-margin medical practices at the expense of comprehensive, patient-centered care. Their investment strategy prioritizes profit-generating procedures and services, often sidelining essential but less profitable areas of healthcare.
- Focus on High-Margin Services: Procedures such as elective surgeries and diagnostic imaging are lucrative and are therefore prioritized. Meanwhile, essential services like primary care, preventative medicine, and mental health services receive less attention and funding, leading to gaps in comprehensive patient care.
- A Health Affairs study found that private equity-owned hospitals performed 30% more elective surgeries but had a 15% lower rate of primary care visits.
- Decreased Quality of Care: By concentrating resources on high-margin services, private equity firms neglect the overall health needs of patients. This narrow focus on profitability can lead to poorer health outcomes and a fragmented healthcare experience.
The Devastating Human Cost
The entry of private equity into healthcare has not just financial implications but also severe human costs.
Patients suffer due to understaffed facilities, diminished services, and financial exploitation.
Healthcare professionals face increased pressure, job insecurity, and moral distress as they are forced to prioritize profit over patient care.
- Patient Outcomes: Studies have shown that private equity ownership can negatively impact patient outcomes.
- Research published in JAMA Internal Medicine found that mortality rates in private equity-owned hospitals were 8% higher than in non-private equity-owned hospitals, and patient satisfaction scores were 5% lower.
- Healthcare Worker Strain: The relentless cost-cutting measures lead to burnout and high turnover among healthcare workers. This creates a vicious cycle where overworked and under-resourced staff are less able to provide quality care, further endangering patients.
- A survey by the American Nurses Association reported that 60% of nurses in private equity-owned hospitals felt their workloads were unsafe, compared to 35% in non-private equity-owned hospitals.
Hospital-Owning Private Equity Buys Life Insurance Policies on Patients
Private equity firms owning healthcare facilities have been caught engaging in the ethically dubious and legally questionable practice of taking out life insurance policies on their patients.
Ethical concerns surrounding the practice of taking out life insurance policies on patients without their full knowledge or consent are deeply troubling.
Investigations have shown a significant lack of transparency, often leaving patients completely unaware of these policies, which starkly undermines the principles of consent and autonomy.
Moreover, when healthcare providers stand to profit from the death of their patients, a severe conflict of interest is created, potentially compromising the quality of care.
This exploitation of vulnerable individuals, particularly those in precarious health situations, for financial gain, highlights a profound moral failing in the healthcare sector.
Private equity investments in healthcare have surged from $5 billion to over $100 billion annually, now owning a significant share of emergency and hospital services, impacting millions of Americans’ healthcare experiences.
Impact on Media
Private equity firms also dominate the media landscape, owning a significant portion of the nation’s daily newspapers.
Over the past decade and a half, more than 2,000 publications have shut down, often following private equity buyouts.
These buyouts typically result in reduced newsroom staff and lower quality of coverage, while subscription prices increase.
The decline in local news coverage correlates with lower voter turnout, less competitive local elections, and more government corruption, further illustrating the detrimental effects of private equity ownership.
The industry’s practices contribute to increased financial burdens for the middle and working class, while private equity managers reap substantial gains.
In-Depth Look at Private Equity’s Media Strategy:
- Publication Buyouts: Acquiring newspapers and online media outlets and reducing operational costs.
- Staff Reductions: Cutting journalist and support staff numbers, leading to diminished investigative reporting.
- Content Shaping: Prioritizing content that supports a pro-investment narrative or reduces scrutiny of financial activities.
With private equity firms owning a significant portion of the media landscape, the reduction in robust local journalism has been linked to lower political engagement and increased governmental corruption.
End of Life Care
The PeePoo Dynamics End-of-Life Life Strategy Officer, Seymour Butts, presents his findings to your team:
“As we approach the analysis of end-of-life profit extraction opportunities, it’s clear that this phase holds the most lucrative potential of all.
After careful consideration, the key to maximizing revenue just before death lies in targeting the inheritance—essentially, capturing the financial legacy meant for the deceased’s family.
One ingenious strategy involves the exorbitant pricing of nursing home care. By setting fees at a minimum of $10,000 per month for substandard, and sometimes even abusive, care, we can tap into a substantial revenue stream.
The breakdown of the traditional family unit through cultural manipulation toward individualism has played right into our hands.
People have been conditioned to live alone and value independence over familial cohabitation.
As a result, when elderly family members can no longer live independently, their relatives are often unable to house or care for them due to their own financial constraints or spatial limitations.
This cultural shift has significantly increased the reliance on nursing homes. With the high cost of care, unless families have proactively placed their homes and assets into trusts—which most have not—we can seize these assets to cover care expenses.
Surprisingly, many people remain unaware of the protective measures available, such as trust funds, leaving their assets vulnerable to being claimed by care facilities as payment.
Thus, by inflating the prices of nursing home care to astronomical levels, we effectively position ourselves to capture the entire lifetime net worth of an individual at the end of their life.
This approach not only secures a continuous influx of funds but also ensures that these assets do not trickle down to the next generation but are instead redirected into our coffers.
It’s like receiving a blank check for someone’s entire life savings. By leveraging the inflated costs of end-of-life care, we can essentially transfer a vast portion of wealth from the public directly to our balance sheets, capturing significant economic gains from each individual at their most vulnerable stage.”
Impact on Nursing Homes & Inheritance
Private equity firms are taking over nursing homes at an alarming rate, capitalizing on the lucrative opportunities in the elder care industry.
As these firms increasingly acquire and manage nursing home facilities, they prioritize profit over the well-being of residents.
This aggressive expansion is reshaping the landscape of elder care, often at the expense of quality and affordability.
This trend raises significant concerns about the future of senior care and the implications for our most vulnerable population.
Key statistics include:
- Increased Patient Mortality: Research indicates a 10% increase in patient mortality rates in private equity-owned nursing homes compared to non-private equity-owned facilities. This translates to over 1,000 additional deaths annually.
- Reduced Staffing: These nursing homes often slash staff hours and reduce the number of caregivers, directly impacting the quality of care patients receive.
- Dangerous Medication Practices: The use of antipsychotic medications, which have serious side effects, has skyrocketed in private equity-owned nursing homes. These medications are often used to manage residents with dementia, despite the risks involved.
- Financial Extraction: Private equity firms frequently extract large sums of money from these facilities through management fees and dividends, leaving less available for patient care and facility maintenance.
The High Costs of Elder Care
The median monthly cost for nursing home care has significantly risen in recent years.
For a semi-private room, the average cost is now approximately $9,000 per month, while a private room can cost around $10,500 per month on average.
However, these costs can vary dramatically depending on the facility’s ownership, location, and the level of care provided.
The ballpark range of a low median monthly cost goes for $5,080 in Missouri to a high of $36,378 a month in Alaska.
At the higher end of the spectrum, premium nursing homes that offer extensive services, superior care, and enhanced amenities can charge upwards of $15,000 per month.
These facilities are often well-staffed and well-equipped to provide high-quality care and a better resident experience.
Conversely, even the more basic, bare-bones nursing homes where care might be minimal and staffing levels are often inadequate still charge steep fees.
It’s not uncommon for such facilities to charge around $12,000 per month.
This high cost does not necessarily guarantee quality care, as these facilities engage in extreme cost-cutting measures that negatively impact the care residents receive.
Private Equity’s Elder Care Strategy:
- Nursing Home Acquisitions: Buying up elder care facilities and cutting operational costs.
- Insurance Exploitation: Engaging in ethically dubious practices such as taking out life insurance policies on elderly residents.
- Resource Reduction: Decreasing staff numbers and care resources, leading to a rise in health complications among residents.
Reports indicate that private equity firms control a large percentage of nursing homes, with these ownerships linked to a higher incidence of health issues and fatalities due to cost-cutting and under-resourcing.
How to Save Millions & Protect Your Family
Many families may not realize that there are effective ways to protect their homes and assets from being used to cover nursing home costs.
One such method is placing these assets into a trust.
This legal arrangement separates your ownership of the assets from your personal estate, meaning they are no longer considered yours in the eyes of the law.
As a result, these assets cannot be counted when assessing your resources to pay for nursing home care, thus protecting them from claims by care facilities.
It also shields you from assuming the capital gains taxes and shelters your family from other side effects of inheriting a home.
It’s important to note that this strategy isn’t just for the wealthy.
Setting up a trust is a practical option for anyone looking to manage their assets wisely and ensure their legacy.
Wealthy individuals often have access to expert advice that helps them use trusts and other strategies effectively, but these tools are available to everyone.
By consulting with a financial planner, you can receive tailored advice on how to safeguard your assets.
This approach helps level the playing field, ensuring that the accumulation of your life’s work benefits your loved ones, not private equity firms interested in facility fees.
Remember, this isn’t financial advice, but a suggestion to seek professional guidance to explore how you can protect your assets and ensure they are passed on to the people you care about, avoiding unnecessary losses to care costs.
Making America Inhabitable Again
You can combat the influence of private equity by adopting several effective strategies:
1. Strengthen Family and Community Bonds: Utilize family and community support for childcare and elder care to reduce dependency on external services.
2. Educate and Inform: Increase awareness about the role and impact of private equity. Knowledgeable consumers can choose alternatives and support local businesses.
3. Advocate for Regulation: Push for regulatory reforms to limit private equity’s reach in essential services. Contact representatives to advocate for transparency and fair practices in sectors dominated by private equity.
4. Protect Personal Assets: Use legal tools like trusts to safeguard assets from being used to cover excessive service costs associated with private equity-owned facilities.
5. Support Community Initiatives: Participate in or support cooperative models for care that prioritize member accountability over profit.
6. Legislative Action: Encourage legislative efforts to eradicate these legal methods of financial exploitation. Urge representatives to implement laws that protect consumers from predatory practices and ensure equitable access to essential services.
This is not just about fighting back against unseen corporate giants; it’s about reclaiming our communities, our rights, and our futures from entities that see us not as humans but as assets to be exploited.
As we move forward, let us be empowered by our understanding and united in our actions.
Only together can we loosen the stranglehold that private equity has on the American Dream.
Stay Curious,
Addie Lamarr
