IIf you are in a vulnerable situation in the UK due to your age, personal circumstances, violent crime or poor health, there is a good chance that someone somewhere – probably an investor in offshore private equity – benefits from your health. and care.
In the case of elderly people requiring end-of-life care, private equity-backed companies have generated significant returns for decades. Our research at the Center for Health and the Public Interest show that around £1.5 billion is withdrawn from the care home sector each year in the form of different types of shareholder and investor returns.
Even during the pandemic, when the nursing home sector witnessed more than 40,000 Covid-related deaths and was backed by £2bn of taxpayer support, a number of private care home firms have continued to focus on making profits, with 122 of them they pay dividend payments totaling £120 million in the first year of the pandemic (an 11% increase on the previous year) – all while many of the staff in these homes were working 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 placed in foster care, have also been treated as a source of income and profit by companies that have makes big margins to purchase and provide these services. More than 80% of children’s care homes are provided on a for-profit basis, with local authority leaders warning that profit comes at the expense of young people in care.
People with serious mental health needs are also an important source of revenue for businesses owned by various corporations. private equity fund And American healthcare companieswhich runs hundreds of inpatient mental health facilities across the UK.
But that’s not all. As our joint investigation with the Guardian revealed, more than half of people seen at 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 SARCs. budget now goes to these companies. These are services for people who have been raped or sexually assaulted, including children. The centers help thousands of victims each year by providing psychological and medical services and gathering forensic evidence for criminal prosecution.
Here again, the returns generated by these companies are very attractive. In the case of the only company for which financial data is available, we found that it paid dividends worth £8.7m over two years, from revenues of £45m sterling that it had generated by providing both SARCS and healthcare to people in crisis. secure custody and accommodation. In 2021, the amount of dividends distributed exceeded the amount of pre-tax profit generated by the company that year.
The lack of democratic participation in the decision to contract out such services is striking – for example, it is difficult to imagine a time when a government minister proposed that the care of victims of sexual assault be privatized. Nor have the three main political parties that have formed governments over the past two decades made any overt commitments to allow investors to generate uncapped profits in children’s homes, mental health facilities or retirement homes for the elderly.
Much of this outsourcing has taken place in silence, often euphemistically described as “public sector reform”, while those who benefit from the services are often least able to raise concerns. Furthermore, there has been no public debate about the types of companies that should be allowed to run such vital services.
While some parliamentarians are speaking out against the possibility that the Spectator and Telegraph could soon be owned by a foreign government, none of them seem concerned that some of our major health care providers are now wholly owned or partly to Chinese Communist Party sovereign wealth funds (in the case of the private cancer care provider) GenesisCarewhich is increasingly present in the United Kingdom) or in the United Arab Emirates (in the case of Circle, the largest private hospital operator in England). Added to this are the many companies that run health and social care services in the UK, including the owners are registered in offshore tax havens.
The mantra that has been used to justify private sector involvement in the provision of health and social care since the Blair government has been: “what matters is what works»: it doesn’t matter who provides the care, it’s the quality of the care that counts.
But a recent study published in the Lancet found that shifting ownership of public 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 article in the BMJ found that private equity participation increased costs for those paying for care, with “mixed to detrimental impacts” on quality. A American magazine Deaths in aged care homes revealed a 10% increase in mortality after the home was taken over by a privately funded company.
Now that we know that there are no health and care services that are off-limits to private equity investors in Britain, nor any limits on the amount of profit they can make from them, it is time for the National Audit Office and other parliamentary committees to do their job and find out exactly where the millions of pounds pumped into these services actually end up and what impact the high rates of return made by these companies have on people facing some of the the most difficult situations imaginable.
