Failure to Rescue

If health care were the housing market, private equity firms would be the flippers. They buy a company or a hospital on the cheap, make some cosmetic adjustments, load it up with debt, and sell at a profit, typically leaving it in a worse state. Indeed, Americans are more likely to have complications during a stay in a hospital that has been acquired by a private equity firm, according to a 2023 study by researchers at Harvard Medical School.

Margin over Mission: When Private Equity Owns Your Hospital, a new book by former Lovelace Women’s Hospital ICU nurse James Kelly, provides numerous case studies that show just how disastrous private equity’s incursion into health care has been—for patients and workers alike. In April 2015, the Chicago-based real estate investment trust Ventas acquired Lovelace Health System, which owned the Albuquerque hospital James worked at.

Ventas—which owns nursing homes, rehabilitation facilities, long-term care centers, and other properties across the country worth some $25 billion—immediately set about making changes. There was an exodus of managers and senior workers. This wasn’t the hospital’s first brush with private equity; in fact, it had been bought in 2002 by a private equity firm called Ardent. But, in Kelly’s telling, Ventas’s ownership led to a significant culture change. In the book, Kelly offers a tragic account of one year working at the hospital under the thumb of private equity, focusing on several preventable deaths that left him feeling alienated. He left the hospital in 2019. Kelly and I spoke about Margin over Mission earlier this month by phone. Our conversation has been condensed and edited for clarity.

—Jess McAllen

Jess McAllen: To start with, I wanted to go into the concept of “shared governance,” where the decisions about things like new equipment, medication changes, or staffing levels are made with both the nurses and administrators in the same room. That seems like a crucial part of a hospital functioning properly, but it also seemed to be one of the first things to go when Ventas took over Lovelace.

James Kelly: It was sort of a revolutionary idea in nursing, that nurses had to get more involved with decision-making, gaining control over practice, especially with modern technology. It’s taken a long time to make inroads into the hospital culture, and nurses should be involved with decisions about testing out equipment and hiring and firing. It’s hard because nurses aren’t used to taking a position of authority; it used to be they would recoil or be subservient. It challenges the hospital hierarchy. At Lovelace, we began practicing shared governance in 2018 or so. We had a very enthusiastic group in the ICU. We met once a month, and we would go through various things, discussing what people did at other hospitals.

We were making inroads, but there was a change in a drug that we administer called Levophed. It’s a very powerful drug used for people in shock. They changed the dose, and we weren’t consulted at all. I was in charge of shared governance, so I talked to the chief nursing officer (CNO) of the hospital. I asked her: Was it the pharmacy? Was it the medical director? And she said it was “corporate.” It was my first time hearing that term at the hospital. It was a major, major change. It was the first sign that something else was going on. 

JM: Did you stop doing shared governance after that?

JK: We didn’t stop doing it, but it did die out. After that happened, people lost enthusiasm for it. They felt like we weren’t making progress. People stopped showing up. We were deflated by that experience. 

JM: You have a chapter titled “I’m Sorry,” which goes into the death of a woman who had a laparoscopy for uterine fibroids and died. The title being a reference to the fact that New Mexico, where Lovelace is based, doesn’t have an “I’m Sorry” law, which is where a doctor saying “sorry” cannot be used as evidence of medical malpractice. The inability to say sorry seemed like something that had really stuck with you. 

JK: I remember that vividly. That was the episode that triggered the book. She’d been on the floor in post-op for the hysterectomy, they called a REACT [Rapid Emergency Assessment Care Team] on her because she was hypotensive, and she later came down to the ICU. I remember her sitting up in her bed, very wide awake, looking both terrified and hopeful. She had two children in their early thirties behind her. I was outside the room, and she kept staring at me. I felt then that she knew something had gone wrong, that she was in trouble medically. She thought I could save her, I think. When they brought her down from the fourth floor to the ICU, she thought, “I want to be saved here.” That’s what her face said to me. 

JM: When telling her story, you write about how faces can get ingrained in your memory in the ICU. How do these deaths—and faces—affect you years later?

JK: I was out for two days, and when I came back, I found out that she had coded and died the night she was brought in. I’m not inured to death. I’ve been a nurse for a long time. I’ve seen a lot of death in the ICU. But that struck me very deeply. What was even more poignant than that was we have a break room in the ICU, and there was a card in there from her children, thanking us for what we did, saying that they knew how sick she was and that we had worked so hard to save her life. I thought: “Well, they didn’t know all that had gone wrong before that, how the hospital didn’t bring her to the ICU in time, how they weren’t treating her very well on the floor.” 

There’s a thing called a “failure to rescue.” It’s a failure to recognize and respond to a non-ICU patient having clinical changes and bring them back from the edge of death. It’s a measure of nursing quality care in acute care hospitals. If someone dies after you call a REACT, that’s a huge failure of the hospital. For her to die, someone who should have gone home the next day, there’s no question about it: we actually missed diagnosing her deterioration. 

JM: Because laparoscopies are typically outpatient surgeries, right?

JK: Yeah, you spend two to three hours in PACU [Post-Anesthesia Care Unit], and then you go home. Even what she had—I think she was septic—a very severe disease and a nationwide problem, is something we treat all the time. You are not going to die of it if you get diagnosed in time. It was very tragic to me.

JM: There seemed to be a few incidents like this, where patients who should have gone to the ICU earlier did not—even if there were available beds. Do you know why there was a reluctance to do so? This is cynical of me, but I would have thought private equity wouldn’t mind patients going to the ICU since it costs more.

JK: I don’t know. I went to the CNO because I was affected by it. I said we should do an investigation and find out what happened, and why they didn’t bring her to the ICU earlier. Maybe we need more education and more training, or maybe the nurses weren’t qualified to take care of somebody post-op like that. But she dismissed it. It shocked me. 

JM: Has telling the stories of these people who had preventable deaths helped you to get some form of closure?

JK: It has. It took a long time for me to figure it out. Because there were five more deaths, and they were all similar. They were all preventable. Closure came from understanding what happened. I felt like I was looking at a puzzle where there’s a lion in the picture, and you must find the lion. I was looking at it, thinking there’s something there that connects all these dots. Then I found the lion, and it was private equity. I figured out that private equity was at the foundation of these deaths because of their cost cutting, their understaffing. 

It really changed me quite a bit. One thing about being a nurse is you must be an advocate. The Nursing Association’s Code of Ethics agrees that you advocate for the patient when they have lost the ability to advocate for themselves, whether by losing their voice from illness, cultural changes, or not speaking English. These patients suffered because of an economic policy, one that caused their deaths, and I can advocate for them through this book.

JM: It can be hard for nurses to be advocates when they work such long hours and start to feel burnout or even compassion fatigue. It’s almost like it gets to a point where patients aren’t seen as people. Did you experience that? 

JK: For years, I didn’t believe in compassion fatigue and all that. I spent a long time as an ICU nurse and never felt it. But in the book, I had that incident where a doctor said to start coding a patient, and I said no, that he was a DNR (do not resuscitate). But I did end up coding him. I felt that I had failed him. The effect of seeing so many deaths that were unexpected and so many things that were wrong. At that moment, I wasn’t the nurse I usually was. 

JM: That sounds like compassion fatigue. Do you think it was? 

JK: I do. Moral injury. It’s the same thing. I was worn down by all the deaths that shouldn’t have happened. There’s a thing they call moral distress, and this guy talks about how over time it builds up, every time something bad happens there is “moral residue,” and it’s called the “crescendo effect.” Suddenly you reach a breaking point.  When you can’t be who you are, where you know the right thing to do but don’t do it. I knew what was right, that we shouldn’t code the guy, but I didn’t stop it. 

JM: It seems like the financial motivations of private equity health care facilities will only increase moral injury within staff.

JK: Definitely. They marginalize the ethics of people who work there to provide care and goodwill. You get marginalized so that you can’t do what you know is right. You have to fight the system in a way, more than you have had to in the past. 

JM: I was wondering if you could talk about staffing by numbers instead of by acuity, and why private equity prefers the former.

JK: Staffing is key in hospitals. It’s the holy grail of nursing. We must have a certain ratio of four-to-one in MedSurg (the area where patients are treated before or after surgery), and two-to-one in the ICU. With private equity, what they do is staff by numbers. They say, “Well, you’re in the ICU, you’ve got eight patients, so you need four nurses.” Sometimes, though, there will be three IMC (Intermediate Care Unit) nurses and one in the ICU, and they will say, “Well, you don’t need extra nurses.” But what they ignore in doing by numbers is how sick somebody is. They would come in the afternoon and say we had to send somebody home, and we’d say, “Well, no, because this guy is getting a bedside tracheostomy.” It caused a lot of problems.

JM: Is that so they can save money on staffing?

JK: Definitely. They would send you home, and you wouldn’t get paid. So, you’d be on call. And the other workers had to work harder because they lost one of their colleagues. In the ICU, that can be very challenging; if it’s busy and you’re doing more than you did before, you might start cutting corners. 

JM: In the book, you discuss a patient who had symptoms of a stroke as well as a former patient who was diagnosed with a stroke, but only one was transferred to a different hospital since Lovelace didn’t have a neurology department. Did you find that when Ventas took over, they were more likely to keep on people they weren’t necessarily qualified to treat?

JK: Absolutely. That was one of the biggest things. We’re small; we were only an eight-bed ICU. Two miles away, there was a hospital that had three ICUs, twenty beds each. Anybody that we couldn’t take care of—interventional radiology, cardiac catheterization, or neurosurgery—we’d send there. We never kept anybody that we couldn’t take care of.

Then, there was this woman who was withdrawing from heroin, and she had a neurological episode and was unresponsive. They wouldn’t send her out. The charge nurse advocated and said we should send her out, and they said, “No, they can’t do anything more that we can’t do here.” That was a real break from precedent because she never should have stayed in our ICU. She wound up dying there. 

JM: Over the past two decades, it seems like private equity has really taken over health care, especially in aging facilities. How can medical staff fight back—if that’s even possible?

JK: One thing I was struck by is that private equity is everywhere in health care. Nursing homes, funeral homes, hospice, urgent care. I think it should be banned. I know there are bills before Congress, like the Stop Wall Street Looting Act and the Health Over Wealth Act, but they are little piecemeal things. I think the goal should really be to reinvent health care as a public good, not as a market commodity. 

In California, Envision Healthcare, which is owned by the huge private equity giant KKR, was preparing to take over the staffing for a hospital in 2021. But the American Academy of Emergency Medicine Physician Group sued them, saying they had violated California laws which bar corporations from practicing medicine. It’s called the COPM, or Corporate Practice of Medicine laws. The slogan was: “Take medicine back.” They said it was time for the profession of medicine to reclaim its ethical basis by expelling corporate interests.

So, Envision withdrew from working in California. They drove them out of the hospital. Isn’t that cool? They took them on—invoked the state law and took ‘em to court—and they backed out. That’s a major victory. That kind of thing is inspiring. Maybe people, nurses, and doctors can galvanize around the understanding that this is a major problem that needs to be addressed by the health care professionals.