Tag: Markian Hawryluk

Death Is Anything but a Dying Business as Private Equity Cashes In

Mary Pat Campbell

Link: https://khn.org/news/article/funeral-homes-private-equity-death-care/

Excerpt:

Private equity firms are investing in health care from cradle to grave, and in that latter category quite literally. A small but growing percentage of the funeral home industry — and the broader death care market — is being gobbled up by private equity-backed firms attracted by high profit margins, predictable income, and the eventual deaths of tens of millions of baby boomers.

The funeral home industry is in many ways a prime target for private equity, which looks for markets that are highly fragmented and could benefit from consolidation. By cobbling together chains of funeral homes, these firms can leverage economies of scale in purchasing, improve marketing strategies, and share administrative functions.

According to industry officials, about 19,000 funeral homes make up the $23 billion industry in the U.S., at least 80% of which remain privately owned and operated — mostly mom and pop businesses, with a few regional chains thrown in. The remaining 20%, or about 3,800 homes, are owned by funeral home chains, and private equity-backed firms own about 1,000 of those.

….

Robertson said the funeral home industry is different from other sectors that private equity firms might consider investing in, describing it as a calling comparable to working in hospice care. Foundation Partners is fortunate their backers understand the service part of the industry, as well as the financials, he said. “Private equity firms aren’t necessarily known for having deep compassion for people. They’re more known for their financial returns,” he said. “To get both is really important.”

Foundation Partners owns Tulip Cremation, an online service that allows people to order a cremation with just a few clicks — and without having to set foot in a funeral home. Tulip currently operates in nine states where Foundation Partners has funeral homes. The company expects the service to eventually operate nationally.

Author(s): Markian Hawryluk

Publication Date: 22 Sept 2022

Publication Site: Kaiser Health News

Despite a First-Ever ‘Right-to-Repair’ Law, There’s No Easy Fix for Wheelchair Users

Mary Pat Campbell

Link: https://khn.org/news/article/power-wheelchair-users-right-to-repair-law-no-easy-fix/

Excerpt:

The multibillion-dollar power-wheelchair market is dominated by two national suppliers, Numotion and National Seating and Mobility. Both are owned by private equity firms that seek to increase profits and cut spending. One way they do that is by limiting what they spend on technicians and repairs, which, when combined with insurance and regulatory obstacles, frustrates wheelchair users seeking timely fixes.

The $70 billion durable medical equipment market has been an attractive target for private equity investment because of the aging U.S. population, the increasing prevalence of chronic conditions, and a growing preference for older adults to be treated at home, according to the investment banking firm Provident Healthcare Partners. Medicare’s use of competitive bidding favors large companies that can achieve economies of scale in manufacturing and administrative costs, often at the price of quality and customer service.

Regulations set by Medicare and adopted by most Medicaid and commercial health plans have led to lower-quality products, no coverage for preventive maintenance, and enough red tape to bring wheelchairs to a halt.

Power wheelchair users have long been fighting for the right to repair their wheelchairs themselves or through independent repair shops. Medicare and most insurance companies will replace complex wheelchairs only every five years. The wheelchair suppliers that have contracts with public and private health insurance plans restrict access to parts, tools, and service manuals. They usually keep a limited inventory of parts on hand and wait until health plans approve repair claims before ordering parts.

Some chairs require a software passcode or a physical key for any repairs. Wheelchair users who make fixes themselves may void their warranty or lose out on insurance payments for repairs.

Author(s): Markian Hawryluk

Publication Date: 2 June 2022

Publication Site: Kaiser Health News