In 2007 Pascack Valley Hospital in Westwood, New Jersey filed for bankruptcy. It cratered from a heavy debt burden taken on in a building expansion. In 2008 Hackensack University Medical Center, a large nonprofit teaching hospital, asked state health officials for permission to reopen Pascack as a joint venture, for-profit facility. The plan calls for renovating the old building. Huh? Hadn't Pascack taken on big debt from facility updates? Maybe their MRI and CT scanners got repossessed. The new capital source for the project, Plano, Texas-based Legacy Health Partners.
In August 2008 Nancy-Ann DeParle was not President Obama's Health Care Czar. Ms. DeParle was a private equity underwriter (PEU) for CCMP Capital Partners. She sat on the board of Legacy Health Partners, an affiliate of CCMP. Between her two roles, Nancy effectively called the shots for LHP. Legacy's August 2008 press release on the Pascack project stated:
At a time when so many New Jersey hospitals are in danger of failing, thus raising the need for government financial subsidies, this project comprises an innovative three-party alliance that addresses the needs of the local community, but requires no public financial assistance.
Guess who wants to tax financially stressed, nonprofit community hospitals? Senator Chuck Grassley and Gail Wilensky. How might a big property tax bill affect a struggling facility? How many will shutter their doors? And how long will it be before Legacy Health Partners tries to open the former safety net hospital as a for-profit facility.
This story will get no press, just like Nancy-Ann's significant stock holdings in for-profit health care companies. Her over $530,000 in 2008 board pay is never mentioned. Nor is her $1.4 million proceeds from the sale of Triad Hospitals, where she previously held a board position. Denny Shelton, the ex-Triad CEO, heads up Legacy Health Partners.
But when Ms. DeParle picks up the phone to scold a for-profit health insurance executive, that story is told. Others are not. This story was spun by a progressive blogger as "why cutting health costs is hard." I hate to tell Matt, but this is the underlying health care deform plan. A cost that can go up without concern is leveraged buyout interest expense. Triad's sale translated to an increase of $4.1 million in interest expense per hospital. HCA's went up nearly $10 million per facility. Pay no attention to the man behind the curtain!
For-profiteers are in charge of change and are fully capable of twisting it in their favor. The blue team is just as tainted as the reds in this regard. For every Chuck Grassley, there is a Max Baucus. PEU's sit in more than one sweet spot, e.g., health care, banking , public infrastructure....
Update 7-1-11: Hackensack University Medical Center's board of directors is found to have widespread self dealing. That's the language of PEU's.