Pulitzer-winning journalist visits NMSU with warning about private equity

Private equity has furtively assumed control over numerous sectors of the economy, enriching a small community of private investors while tightening its grip on essential services on which the majority depends: This argument is a theme of a recent book by Pulitzer Prize-winning journalist Gretchen Morgenson, and a talk she plans to give Tuesday evening, Feb. 20, in Las Cruces.

New Mexico State University’s College of Business and Center for Border Economics is hosting a public talk where Morgenson will sign copies of her 2023 work, co-authored with Joshua Rosner, “These are the Plunderers: How Private Equity Runs and Wrecks America,” from Simon & Schuster.

“Private equity is kind of a secretive financial system, an approach that has been rising importance in this country and has been taking over vast swaths of our economy,” Morgenson told the Bulletin in an interview. “Health care is a huge area where private equity investors have taken over a tremendous number of physician practices, emergency departments, hospitals.”

Per reporting from ProPublica, private equity investment companies control over $6 billion in assets in the U.S., acquiring companies in various industries in order to restructure them and sell them off for a profit. 

Critics have raised alarms about private equity holdings in the health care industry, in particular, including some community hospitals. In Las Cruces, Memorial Medical Center is owned by LifePoint Health, itself a property of private equity firm Apollo Global Management.

Morgenson said impartial academic research is finding that “bad outcomes increase dramatically when private equity gets involved in healthcare.” 

For instance, she cited studies by Harvard University and University of Chicago showing widely different hospital outcomes overall for patients before and after private equity buyouts. “After the buyouts, these academics found a spike in serious infections, patient falls and blood clots after private equity became involved,” she said, a trend found in other academic studies as well. 

“Private equity has the reputation of slashing jobs,” she continued. “Academic research shows that the average decline in jobs at a company taken over by a highly leveraged private equity firm is 13 percent.” 

In seeking interviews with private equity firms themselves, Morgenson said they have countered with claims that they have created more jobs than they have cut; but she said none provided with documentation supporting the claim. 

Morgenson is a senior financial reporter for NBC News and has previously been an investigative journalist at the Wall Street Journal and an assistant business and financial editor as well as a columnist for the New York Times.

She won a Pulitzer Prize in 2002 for her reporting on Wall Street and cowrote “Reckless Endangerment,” a 2011 book about the U.S. mortgage crisis.

“(Morgenson) has been a sharp critic of our most powerful institutions, and our students will benefit greatly from her insights derived from her long experience in journalism and business,” College of Business Dean Bryan Ashenbaum stated in a news release.

Morgenson’s talk is scheduled for 5 p.m. to 7 p.m. Tuesday at the Yates Auditorium, in Domenici Hall on the Las Cruces campus of NMSU. It is free and open to the public.