Wall Street wants to make money off “urgent care”

If there’s profit involved in some aspect of the human condition, America’s big money investors will try to find a way to inflate the price and take a cut. The latest profit-from-suffering scheme is to try to grab a slice of the revenue stream from urgent care clinics that are not part of hospitals.

But what is happening here is also playing out across the nation, as private equity investment firms, sensing opportunity, invest billions in urgent care and related businesses. Since 2008, these investors have sunk $2.3 billion into urgent care clinics. Commercial insurance companies, regional health systems and local hospitals are also looking to buy urgent care practices or form business relationships with them.

The business model is simple: Treat many patients as quickly as possible. Urgent care is a low-margin, high-volume proposition. At PhysicianOne here, most people are in and out in about 30 minutes. The national average charge runs about $155 per patient visit. Do 30 or 35 exams a day, and the money starts to add up.

Urgent care clinics also have a crucial business advantage over traditional hospital emergency rooms in that they can cherry-pick patients. Most of these centers do not accept Medicaid and turn away the uninsured unless they pay upfront. Hospital E.R.s, by contrast, are legally obligated to treat everyone.

I suppose it would be too much to suggest not trying to introduce a profit motive into every single thing — or to treat every citizen as a potential cash cow. Too much to ask that people only be asked to pay the actual cost of their urgent health care without having to pay extra to make billionaires wealthier. Don’t even suggest that this could be made a public function.

In Mass., Goldman wants in on prison profit stream

new-york-stock-exchange-200Recently, in some states, Goldman Sachs has been issuing “social impact bonds,” a new financial instrument that purports to help cure social ills with Wall Street’s “help.”

In this case, they’re loaning $9 million to the state of Massachusetts to help support a Boston organization that tries to help young offenders from bouncing back into prison. (Reducing young recidivism is a good social goal, obviously, and would have a ripple effect on crime prevention.)

If the effort reduces the number of days past inmate spend back in prison — which would save the state money — the savings would go back to Goldman Sachs, up to a million dollars. If the effort really pays off (above and beyond the bond repayment terms), then the state would get to keep the money. Of course, if the effort doesn’t hit the minimum targets needed to generate enough savings, Goldman Sachs would still get interest payments on the bond, but would lose the principal loan ($9 million or however much of it couldn’t be repaid due to insufficient savings).

As private investments in the prison industry go, it’s not the worst thing in the world. At least the profit incentive is toward rehabilitation rather than toward further imprisonment in the way privatized prisons are. But the question is why is it even necessary to involve the private sector middleman in the first place?

The state could pay for the upfront cost of the program through tax revenues (if it were willing to raise taxes, of course), instead of taking a loan, it would keep all the money and not end up paying Wall Street no matter how things turn out. That money could be reinvested into expanding the successful efforts even more, thus benefiting all taxpayers.

In my opinion, the job of corrections and the rehabilitation of young offenders is part of the role of government. The private sector is free to help, but it should be an add-on to the process, not a redundant profit diversion mechanism in the middle.

Moreover, Goldman Sachs has a pretty notorious history of cooking the books (BBC video) to make money while temporarily making their loan recipient governments look like a success story until Goldman’s gotten all its money back.

And that’s not a good track record to have, going into this plan.

h/t Universal Hub

Recovery Accomplished (for the rich)

The Federal Reserve today announced it would start dialing back its “quantitative easing” stimulus measure next month. Despite Wall Street’s complaints that the policy was encouraging too much stocks speculation (because it discouraged investments in U.S. treasury bonds), outgoing Chairman Ben Bernanke had previously pledged to keep it going until certain indicators of economic recovery were met. Apparently he now feels the jobs market outlook — not the actual numbers — is positive enough to satisfy his terms. The Democratic nominee to replace him, Janet Yellen, is going along with it for the moment, although she tends to be more strongly in favor of emphasizing employment goals over inflation goals.

Meanwhile, in Real America, rising stock prices are utterly irrelevant because they aren’t translating to higher wages for the workers at those companies and because more than half the U.S. population doesn’t own any shares anyway. Plus, there are still more people looking for work than there are jobs available. But by all means, let’s save Wall Street speculators from their own out-of-control greed to prevent them from re-bubbling and then re-crashing the economy while they play around with their spare money instead of being “job-creators.” Time to taper stimulative measures despite persistently low job growth because big-money investors are too eager to gamble in the markets.

AFD 67 – Wall St Goes Rent-Seeking

Latest Episode:
“AFD 67 – Wall St Goes Rent-Seeking”

Guest co-host Greg joins me to talk about Wall Street’s big plans for renters, a ruling on the NSA, and a US drone strike in Yemen.

Additional links:

– WSJ: “Blackstone Tries Bond Backed by Home-Rental Income

– AFD: “NH State Rep: Scott Brown *is* Tyranny

Note: Next Monday, December 23rd, will be posting a special bonus half-episode of two additional segments that Greg and I recorded this week. It will be released only through the website.