Rollups: Private Equity Eyes Youth Treatment Centers as a Takeover Target

[babylonsister]

Last edited Thu Feb 17, 2022, 01:51 PM - Edit history (1)

The American Prospect
Home Money, Politics and Power
Rollups: Private Equity Eyes Youth Treatment Centers as a Takeover Target
A new report highlights increased private equity investment in troubled teen, foster care, and other behavioral services, alongside disturbing reports of abuse and neglect.
by David Dayen
February 17, 2022
This story is part of a new Prospect series called Rollups, looking at obscure markets that have been rolled up by under-the-radar monopolies. If you know of a rollup like this, contact us at rollups(at)prospect.org.


As I have said before, the most soul-crushing, exploitative, and just plain sleaziest industries in America today will invariably have private equity firms lurking behind them. Many of the biggest payday lending firms are private equity–owned. Just this week, Madison Dearborn Partners purchased MoneyGram International, which has been repeatedly cited for abetting money laundering and elder fraud. What was once the only for-profit detention camp for migrant children was owned by the private equity firm DC Capital Partners. Endeavor Capital owns the nation’s largest for-profit bail agency; the same company ran a network of for-profit colleges. One PE firm, HIG Capital, has birthed virtually all of the nation’s for-profit prison subcontractors, which exploit prisoners with high-cost food, communications, and medical services.

So the revelations in a new report from the Private Equity Stakeholder Project, provided exclusively to the Prospect, should come as no surprise. In youth behavioral services like “troubled teen” centers, for-profit foster care, and services for young people with intellectual and developmental disabilities (in particular services for people with autism), private equity has increased its investments, capitalizing on government health care dollars and a steady stream of at-risk youth.

Private equity’s goal isn’t to provide a safe and comfortable environment for those in its care, it’s to make outsized returns. And while private equity firms have pulled hundreds of billions of dollars in dividend and management payments out of these facilities, reports of inadequate staffing and training, substandard living conditions, physical and sexual abuse, and the use of restraints and solitary confinement have proliferated. They’re a by-product of the private equity business model.

more...

https://prospect.org/power/rollups-private-equity-eyes-youth-treatment-centers-as-takeover-target/

[Caliman73]

1. The profit motive is obscene.

I have no problem with people getting paid, even making good money from providing valuable skills, products, and services. A doctor spends years in school, grueling rotations, and makes life and death decisions. They should be well compensated. A teacher helps to shape the minds of our children. Should be well compensated. If you develop and make a better car/computer/phone/etc... you should be well compensated.

The problem is when profit is the only motive. A doctor who is motivated primarily by making money, will cut corners, will over charge, will likely engage in fraudulent practices, and will operate like that until caught, hoping not to, or that the consequences will be sufficiently weak that they can continue to operate.

The goal of private equity firms is to make money. For themselves and for their investors. They have little incentive to actually provide services necessary to work with chronically mentally ill people, DD and ID people, or prisoners. You cannot trust medical, social, or any human service to profit seeking entities.