Rosemary Batt

How the financialization of healthcare has eroded the quality of care, driven up prices, and worsened health inequalities Financial actors and healthcare leaders increasingly view healthcare organizations as financial assets to be bought, sold, and managed for maximum profit, regardless of the effects on patient care. Healthcare in the Age of Finance Capital reveals how the federal government enables financial opportunism in healthcare and offers bold ideas for overhauling a failed system. Rosemary Batt and Eileen Appelbaum provide a unique analysis of the financialization of healthcare, a process in which a growing proportion of the healthcare economy is owned and controlled by the financial sector. Healthcare organizations increasingly depend on financial machinations and the earnings derived from them rather than revenue generated from patient care. The extent to which financial calculations overshadow the healthcare mission depends importantly on institutional legacies, reimbursement rules, and the failure of regulatory oversight. Batt and Appelbaum show how differences in regulations and financing rules shape whether financial actors can penetrate distinct healthcare segments—from hospitals, nursing homes, and ambulatory care to physician specialties, home health, hospice, and autism services. Nonprofit healthcare is not immune from this financial logic. Evidence based, accessible, and informed by real-world examples, Healthcare in the Age of Finance Capital sheds critical light on how financial deregulation coupled with the relaxation of health, tax, anti-trust, and labor laws have allowed financially driven actors to exploit public funds for private gain at the expense of healthcare organizations, patients, communities, labor, and taxpayers.

Private equity firms have long been at the center of public debates on the impact of the financial sector on Main Street companies. Are these firms financial innovators that save failing businesses or financial predators that bankrupt otherwise healthy companies and destroy jobs? The first comprehensive examination of this topic, Private Equity at Work provides a detailed yet accessible guide to this controversial business model. Economist Eileen Appelbaum and Professor Rosemary Batt carefully evaluate the evidence--including original case studies and interviews, legal documents, bankruptcy proceedings, media coverage, and existing academic scholarship--to demonstrate the effects of private equity on American businesses and workers. They document that while private equity firms have had positive effects on the operations and growth of small and mid-sized companies and in turning around failing companies, the interventions of private equity more often than not lead to significant negative consequences for many businesses and workers. Prior research on private equity has focused almost exclusively on the financial performance of private equity funds and the returns to their investors. Private Equity at Work provides a new roadmap to the largely hidden internal operations of these firms, showing how their business strategies disproportionately benefit the partners in private equity firms at the expense of other stakeholders and taxpayers. In the 1980s, leveraged buyouts by private equity firms saw high returns and were widely considered the solution to corporate wastefulness and mismanagement. And since 2000, nearly 11,500 companies--representing almost 8 million employees--have been purchased by private equity firms. As their role in the economy has increased, they have come under fire from labor unions and community advocates who argue that the proliferation of leveraged buyouts destroys jobs, causes wages to stagnate, saddles otherwise healthy companies with debt, and leads to subsidies from taxpayers. Appelbaum and Batt show that private equity firms' financial strategies are designed to extract maximum value from the companies they buy and sell, often to the detriment of those companies and their employees and suppliers. Their risky decisions include buying companies and extracting dividends by loading them with high levels of debt and selling assets. These actions often lead to financial distress and a disproportionate focus on cost-cutting, outsourcing, and wage and benefit losses for workers, especially if they are unionized. Because the law views private equity firms as investors rather than employers, private equity owners are not held accountable for their actions in ways that public corporations are. And their actions are not transparent because private equity owned companies are not regulated by the Securities and Exchange Commission. Thus, any debts or costs of bankruptcy incurred fall on businesses owned by private equity and their workers, not the private equity firms that govern them. For employees this often means loss of jobs, health and pension benefits, and retirement income. Appelbaum and Batt conclude with a set of policy recommendations intended to curb the negative effects of private equity while preserving its constructive role in the economy. These include policies to improve transparency and accountability, as well as changes that would reduce the excessive use of financial engineering strategies by firms. A groundbreaking analysis of a hotly contested business model, Private Equity at Work provides an unprecedented analysis of the little-understood inner workings of private equity and of the effects of leveraged buyouts on American companies and workers. This important new work will be a valuable resource for scholars, policymakers, and the informed public alike.

Despite formidable obstacles, a small but growing number of U.S. companies rccognize that today's domestic and international markets require them to transform their production process. On the basis of more than ten years of survey data and the evidence of case studies, Eileen Appelbaum and Rosemary Batt analyze the experiences of these companies. Their findings reveal two distinct and coherent models of the new American workplace. One is an American version of team production, which combines the principles of sociotechnical systems with those of quality engineering and which decentralizes the management of work flow and decision making. The other is an American version of lean production, which relies more heavily on managerial and technical expertise, and on centralized coordination and decision making. The authors explain the organizational models from which high-performance firms in the United States have borrowed and outline the policies required to promote more widespread workplace change. They contend that U.S. firms can, in fact, compete successfully, while providing their workers with increased job security, livable wages, and enhanced job satisfaction. Certain to appeal to both union and business leaders, this volume also offers crucial insights to policy makers and to scholars of the new American workplace.