Book Review: Ethically Challenged captures private equity intrusion

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In her new book Ethically Challenged: Private Equity Storms US Health Care, Laura Katz Olsen presents a thorough investigation and analysis of private equity's involvement in the U.S. healthcare system. Olson takes the reader on a deep plunge into nonmedically or dentally trained owners' control of healthcare companies. The resulting consequences of higher costs, loss of the doctor/patient relationship, and diminished standards of care are brought to the fore through exhaustive examples and extensive reference sources.

Unlike most corporations that manufacture goods and provide services, private equity firms utilize borrowed money to buy and sell businesses in an attempt to generate huge profits over the shortest time frame feasible. Concurrent with our capitalist economic system, corporations are charged with the responsibility to generate maximal returns on shareholder investment.

Dr. Michael W. DavisDr. Michael W. Davis

Private equity among U.S. corporations is generally under intense pressure to maximize profits in the shortest time frame feasible. For the healthcare sector, that means company officers and directors are answerable to their shareholders, not to patients.

In contrast, the doctor/patient relationship is incredibly unique. Doctors hold expert knowledge and training vastly superior to that of patients, and doctors are required to place the interests of their patients above all other competing interests. That includes specialist referrals, laboratories utilized, informed consent, care transparency, and the selection of methods and materials in clinical therapies.

The contrast between the interests of the private equity industry versus the ethical and legal responsibilities secured within the doctor/patient relationship could not be starker. Olson's book alerts readers to the modern reality that, to an increasingly significant extent, healthcare decisions are not fully made between patients and their doctors, but are based on a hidden figure determined to immediately maximize company revenues.

"Americans treasure the autonomy of our physicians, eschewing the notion that government or commercial enterprises should interfere with medical decisions," Olson writes. "Nonetheless, we have the most corporatized healthcare system in the industrial world, where community-based practitioners have increasingly become employees."

The extensive breadth of this book examines addiction recovery centers, facilities for eating disorders, dermatology and cosmetic surgery clinics, orthopedics, gastroenterology, urology, dialysis clinics, fertility centers, urgent care clinics, optometry and ophthalmology, home care for frail elders and children, as well as healthcare transport services. Of special note is an entire chapter (Chapter 5) dedicated to the dental industry.

“We have the most corporatized healthcare system in the industrial world, where community-based practitioners have increasingly become employees.” - Laura Katz Olsen

Readers may find a fascinating connection that much of private equity's investments are funded by public employees' retirement pension money. And at the same time, a high percentage of private equity's healthcare investments focus on serving the Medicaid and Medicare sectors -- the same population that funds these types of healthcare corporations and will most likely one day rely on such companies' services.

Olson points to inadequate regulatory legislation plus lax enforcement of existing statutes as problematic. Private equity healthcare companies frequently rebrand, a strategy that can be viewed as a nefarious attempt to hide a variety of sins inclusive of financial fraud, consumer and government fraud, and malpractice. Another deleterious contributing element is that current U.S. tax codes allow private equity access to trillions of dollars in 401(k) plans and individual IRA accounts.

"Only a radical transformation of the U.S. tax laws, financial system, and regulatory bodies will truly stop [private equity] from gaming the system and looting everything of value," Olson writes.

This book should be essential reading in the pregraduate curricular training of doctors, dentists, and all healthcare providers. In fact, prior to applying for admissions for healthcare training, an applicant would be wise to read and understand the implications held within Olson's work.

More so, national healthcare policymakers, legislators, and their staff, as well as governmental regulators, must come to terms with this book's contents. Denial is no longer a viable option.

Ethically Challenged: Private Equity Storms US Health Care by Laura Katz Olson was published on March 8, 2022, by Johns Hopkins University Press. It is available both in hard copy and e-book format. (ISBN: 9781421442853; number of pages: 440.)

Dr. Michael W. Davis practices general dentistry in Santa Fe, NM. He also provides attorney clients with legal expert witness work and consultation. Davis currently chairs the Santa Fe District Dental Society Peer Review Committee. He can be reached at [email protected] or

The comments and observations expressed herein do not necessarily reflect the opinions of, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.

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