Vanguard Overall health Systems Dissertation

A

THE DMC/ VANGUARD ACQUISITION

By

Steven Malik Shelton

The Blackstone Group is known as a private equity organization that attained a majority value stake in Vanguard Wellness Systems with a $1. 75 billion dollar investment in 2004.

In accordance to Josh Kosman, business reporter intended for the New York Post, private equity firms purchase businesses through leveraged buy-outs in which the most of the money pertaining to the buy comes from loading the acquired company down with personal debt. Kosman declares that Vanguard actually obtained the money to finance its buyout by the Blackstone Group, and " pertaining to the year ending June 40, 2008, Vanguard spent 122 million upon debt obligations which contribute to a 4 million dollar loss from continuous operations. In the event something will not change, Vanguard may not be able to pay it is interest and certainly defintely won't be able to shell out its theory, which is due in September of 2011. ” one particular But in accordance to a the latest article in The New York Moments, (October twenty eight, 2010) Blackstone is increasing its investment portfolio simply by aggressively refinancing the debt of companies underneath its administration. " A lot more than 50 percent with the debt taken by Blackstone companies offers either been refinanced at a lower cost or modified with better terms. ” 2 (" Debt Energy sources Private Equity Revival, ” by simply Peter Lattman and Jordan J. entre ma Merced. Accessible online at www.nytimes.com/2010/10/29/business/29blackstone.html)

According to a study that appeared in the Canadian Medical Association Log, investor-owned private hospitals have practically 20% larger charges than nonprofit hospitals. The experts although located in Canada, done their study based on data from hospitals located through the United States. Dr . Steffie Woolhandler, says that for-profit clinics show a tendency to demand higher prices for inferior care, also to skimp on rns while spending lavishly upon executives and paper-pushers. Dr . Woolhander continued to say that studies show a pattern that for-profit dialysis clinics include higher fatality rates, that for-profit hospital have decrease quality breastfeeding care and that they perform numerous unnecessary center operations. And Harvard Mentor, Dr . David Himmelstein who will be a staunch advocate against for-profit hostipal wards said that there is 2 percent higher fatality rate in for-profit hostipal wards compared to nonprofit hospitals.

A press release granted by the American Federation of State, State and City Employees assert that Vanguard's controlling fairness firm (the Blackstone Group) has substantive holdings which have been negatively affected by the current economic downturn. The press release goes on to state, " In Phoenix, Vanguard acquired then closed a community hospital portion a low-income area while expanding in an upper-income provincial area. In California the system spun-off three hospitals to a new for-profit after several years of financial losses, keeping only the more profitable operative centers and profits through the sale of the medical building on the medical center campus. ” 3

News reporter Josh Kosman claims to acquire visited Vanguard hospitals in Chicago (Louis A. Weis Memorial and McNeil) and reported these to be needing. And the Joint Commission which in turn works on bringing up the level of treatment at clinics surmised that in certain types of treatment when myocardial infarction patients have to have their arterial blood vessels opened, seven of eleven Vanguard hospitals checked out in 08 performed below average. " With the many demands on the U. S. health-care system, which include nursing shortages, high costs intended for malpractice insurance, and the need to provide look after millions of indigent and uninsured patients, the financial challenges of hospitals cannot be blamed primarily about private-equity owners, ” stated Kosman. " Many of the hospitals that private-equity firms attained have been designed for acquisition exactly because these were having...

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