It is the real estate that the hospital sit upon which generates profits.
Many of the hospitals purchased by private equity have owned both the buildings and land with low levels of debt, some with none at all. Getting at that unencumbered real estate is where private equity hits pay-dirt using an age-old real estate strategy called “Sale and Leaseback.”
Working hand in hand with private equity firms are real estate investment trusts (REITs), which have $185 billion in healthcare holdings. Private equity managers like Cerberus sell a hospital group’s land and buildings to the REITs and turn a huge profit.
Then they sell off the hospital.
“The Pillaging of Steward Health Care”:
In the months leading up to the bankruptcy, multiple stories appeared in media outlets highlighting Steward’s many issues, including unpaid vendors, supply shortages and stockouts, understaffing, repossessed medical equipment, service cuts, and hospital closures.
Some examples:
- A hospital in Florida was infested with thousands of bats and their accompanying bat guano, including on the floor that housed the intensive care unit.
- In Massachusetts, a woman who gave birth died after the embolization coil needed to stop a bleed following childbirth was unavailable. The hospital’s supply of embolization coils had been repossessed by the company that owned them because Steward had not paid its bill.
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Cerberus, a monstrous three-headed dog that guards the gates of hell. At least they chose a good name.
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Yes, we hear stories of small rural hospitals being acquired with promises of better service only to be loaded with debt, forced into bankruptcy and closed.
There has to be a better way. Too few insured patients. Declining population. Aging population with greater needs as young leave the area for better jobs. Low Medicaid payments. Rural hospital out of network forcing patients to use larger hospitals instead.
What is the answer to this problem? Govt requiring minimal service throughout the country? Provided by govt?
We hear that Canada requires patients to travel for some services. But those services such as MRI are available. At least patients have access to quality healthcare.
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I’ll venture a solution; tax the wealthy more.
Then, government will have money to represent the people and provide needed services.
That’s the opposite of what neoliberalism has been doing for forty-some years.
People ask how, or say the wealthy will just leave. We did it for thirty years after the second world war. Maybe we could do that again.
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I cannot think of any other way. The Medical Industrial Complex, much like the Military Industrial Complex, has proven that money trumps all. One possible solution, I guess, is to just let people die, that’ll solve a lot of problems. But not too many folks are going to sign up for that. Indirectly, maybe without knowing it because of wishful thinking, Americans are voting for all of this. I listened to campaign speeches, to all of the promises, and then went back and looked at the actual action’s politicians took during previous years in power. Action’s speak much, much louder than words, to me anyways. The Electorate believes in fantastical boasting, and they elect that. Look no further than DOGE making fantastical-fantasy claims of “savings”. And then it turns out the Trump admin has spent more in 1st 3 months than the previous admin did in the year ago 3 month period.
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We continue to hear that physicians find specialties and big cities more profitable. Hiring physicians in rural areas is more difficult. And many chose not to be primary care physicians.
One way is to boost supply. Government hospitals could become teaching hospitals. Scholarship funds could be available for those who choose primary care and you could require them to serve x years at assigned locations. Year for year might work best. For each year receiving scholarship funds work a year at an assigned location.
We know how and could do much more. But AMA et al strongly oppose the increased competition.
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I disagree. More than 50% of the people who turn 65 this year are going to sign up for Medicare Advantage.
intercst
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