The landlord gutting America’s hospitals
motherjones.com
motherjones.com
In my opinion, as a lay person who reads the news, asset stripping seems to be a way of "hacking the system" - doing a series of things, individually permissible by the rules, to achieve personal gain at the cost of social harm. I think, we should forbid dumping negative externalities on people. But which step is the actual wrong?
Your wording strongly implies you think there's something shady going on, but what's the actual issue here? It's a private company, after all. Minus the concern of minority shareholders getting screwed over by the transaction, there isn't anything obviously intrinsically wrong with restructuring the ownership structure of a company you own. If a given company is only limping along because it owns real estate and pays $0 in rent, arguably the right thing to do is let the company fold - creative destruction and all that.
Of course, there's probably a reason why the business in question is faltering. Either it's being mismanaged, or the market conditions can't support the business any more. Letting it limp along might be the politically expedient thing, but it doesn't fix the underlying issue. Moreover, in the case of a market issue being the cause, not fixing it means there won't be competitors to take its place, which is basically a way to guarantee a "too big to fail" situation. To be clear, I'm not suggesting the area go without a hospital because the market conditions aren't right, it's that the government should fix the problem with rural hospitals (or whatever) rather than letting a bunch of zombie hospitals limp around.
So is closing down the local sawmill and putting hundreds/thousands out of a job.
People are quick to jump to free market reasoning because it's quick, easy, and requires little to no thought or nuance. But step number 1 is you have to prove said market is a free market. And, if it's not, you then have to prove forcing it to be a free market is not only possible, but beneficial for society as a whole.
Nobody does that though, because it's hard. So they just hope if they skip the most fundamental part of free market reasoning that nobody would notice. No, we notice.
... to defend something that is broken, because it assuages their belief in the just world fallacy. I would say that we could actually use more freer market dynamics for many aspects of healthcare. But they need to be appropriately applied to areas where there are specific problems that can actually be fixed with things like more transparency, patient choice, etc - AND NOT in ways that merely justify the existence of problems or even exacerbate them!
When the automobile was created it destroyed makers of buggy whips. When steam ships were created it destroyed sail makers.
What exactly was / is being created here? We're talking about asset transfers and shells games.
But it probably just makes more sense to prevent the development of such wildly opposed incentives that necessitate that kind of highly detailed mediation. For example hospitals are public-facing institutions, they shouldn't be primarily operating out of rented buildings like some vape shop.
There is a distinction between shady and illegal. What they do is legal. Doing it behind closed doors while the company is privately owned and then having an IPO is shady.
At least you immediately get the treatment you need, in the case of the latter.
I live in a rural area and there’s a hospital system here that owns basically all the providers - everything is all remarkably expensive and booked out way into the future. There’s a smaller independent provider that I recently looked into but they’re scheduling new patients out by more than a year!
Bruh, where I am in European socialized medicine land, six weeks wait for an MRI is rookie numbers. How about 6-12 months. Sure, you might die until you get your turn, but at least it's "free"*.
*) paid form everyone's taxes
EDIT: Spot checking in a Canadian town with similar demographics as my own shows wait times roughly comparable to mine, and nothing anywhere near 6-12 months - worst case is about 14 weeks.
EDIT: Just checked NHS too, most recent month had ~3% of MRIs waitlisted more than 13 weeks, so pretty similar in that European country as well.
Not only do we pay significantly more, but we have significantly worse health care outcomes. The hallucination and delusion that Americans get "good healthcare" because they pay so much is just not true. We, objectively, get worse healthcare.
They are very common in orthopedic medicine.
That said, there is a pretty big difference between screening and elective medicine.
I dont see data as the problem, but the decision making around it. Preventing the generation of data may be a solution, but I dont care for it as a strategy.
I’m in my early 40s and have had 1. Everyone I know well has had 1 or (more typically) none, including my parents and in-laws, so I figured ~2 lifetime MRIs would be in the right ballpark
How it's going : https://canjhealthtechnol.ca/index.php/cjht/article/download...
https://www.axios.com/2025/03/17/private-equity-health-care-...
“We’ve tried nothing and we’re all out of options.” seems to be the equilibrium we keep arriving at, despite it being unsustainable.
Your healthcare is entirely decided by people who are not your doctors. Every medicine you take, how long you go to the doctor, what surgeries you can get - your insurer unilaterally decides this. Not your doctor.
There's no voting system or merit system. You can't just simply find a better doctor - because your doctor is an empty vessel, they make no decisions. You have, legitimately, zero recourse.
Shooting someone is then very rational. We have made that one of the only choices, period. The insurance companies have all but guaranteed this outcome.
A fully public single payer system would mean bureaucrats would produce a report concluding that more doctors are needed to keep costs from spiraling, and the number of residency slots would be increased. A more freer market would mean hospitals/doctors were paying for all of their own residency slots and they'd up the number through price signals. Instead, we have neither feedback mechanism.
If you're referring to my second paragraph - the difference is that the medicare part of the system does not have to fully contend with the resulting cost from doctor shortages as it sets its own prices below market rate.
The larger overall point is that system is only responsible for half of what we experience with American health care - the shortage part. But then we don't even get the benefits of the price controls until we reach Medicare age.
Obviously, the system has an enormous problem: it costs too much, because medical providers operate cartels that jack prices up.
> medical providers operate cartels that jack prices up.
These two statements are in direct conflict. If it were a thriving private-sector market, then providers wouldn't be able to form cartels that jack prices up.
I'd say Medicare is a good chunk of what's giving us the worst of both worlds. It's full of mandates that warp the entire system, but then fails to take responsibility for the warped system. Like sure we both agree that Medicare should fund drastically more residency slots. But my point is that the problem is Medicare doesn't actually have to pay the full cost of the high prices it has created with things like the residency slot shortage.
> where people's medical costs drastically increase, publicly-funded single-payer kicks in; before that, people with (actuarially) far lower costs
This analysis is entirely backwards on so many fronts. I'm not even really a proponent of single payer, but your point pushes me in that direction. Higher variance but lower average costs earlier in life are exactly where it would be most effective to spend public funds - keeping more people from financial ruin per dollar spent, more productive and enjoyable years of life, younger people are more likely to proactively obtain/consent to medical care, better outcomes from interventions being done earlier.
Imagine the opposite of what you're championing - use public funds to try to keep everyone alive until they've had 65 years of life, after which point part of your retirement savings would be a plan that determines how many resources might be spent on giving you a few extra years of not-so-great life. That seems both more efficient and more fair to me.
I don't understand your strident "entirely backwards" argument, since I'm literally stating the premise of Medicare; I didn't make any of that up.
And sure, there are many metrics by which to evaluate a health care system. It feels like the US system is somewhere from poor to mediocre on most of them, and only excels in outcomes for the extremely rich (enough money to stomach paying for your own concierge doctor to diligently follow your case and make up for the system's failings). Which is why your succinct description of the government-induced supply shortage resonated with me, and why I keep coming back to the general condemnation of "the worst of both worlds". But it seems like you aren't spending enough effort reading my comments to get my substantive points.
For-profit hospitals have waiting lists too. I had to wait 6 weeks to see one doc, who referred me to another doc. I waited 3 weeks to see that, then was referred to yet another. Another 5 weeks to see the third, and another 5 weeks to see a fourth. Each time I have to take time and money out of my schedule to do this important runaround.
Give me that socialized healthcare please.
Medicine has a lot of things that make it naturally not work like a normal good or service market. To deal with some of these issues, it's a heavily regulated field, but many of these regulations also make it ripe for exploitation by for-profit entities.
For a grocery store, you're talking about 'a commodity' with many suppliers all supplying an equivalent product. So changing grocery stores isn't a big deal.
So if one grocery store charges a fortune, you just go to a different one. For healthcare, how often do you visit a hospital and when you do, how much do you care about price since you cannot tell the difference in quality beforehand
In the US, sure. Where else? Because it's so expensive that literally one admission can bankrupt you
Food is a more fundamental need. It's also available in many more places and easy to compare prices.
Say you need a knee replaced. And one place is 1000$ less expensive, that's where you go? Or do you now read reviews on the doctor etc etc.
When was the last time you read a review on a grocery store? The stakes are very different in cost and outcome
You've so far argued that they're not. Unless you also go price shopping for your groceries every time.
I don't know of anyone forgoing medical care they needed because of cost. People go deep in debt to pay for it. Most people go to a hospital because they want to get better not because they're looking for a bargain.
And finally, the people that get their healthcare through work probably don't have time/will to get quotes because it's not like that's straightforward
There are other circumstances, that I recently dealt with in our family, where someone shows up to the ER with an emergent issue, and then, say, based on what's found in the ER, winds up in the ICU for a significant period of time. It's extremely difficult to price shop this, because you don't know what you're going to be buying until after you've already chosen the hospital.
This is also why provider networks were invented, so that these prices are negotiated in advance.
https://www.kff.org/health-costs/issue-brief/hospital-margin...
The entire point is most of the surplus from the hospital is being extracted as real estate rent. The hospital itself doesn't need to post a profit in order for the overall scheme to be profitable for the perpetrators.
Furthermore as far as getting into this situation, administrators of a non-profit are just as capable of asset stripping to post good numbers in short term, and self-dealing to enrich themselves long term.
Currently the hospitals are working in an environment where the market forces can't work properly. That's why the prices of the medical services are so expensive. No competition, limited supply, over regulation, incentives between the hospitals and the insurers are bad.
The argument of "it's too important to be for profit" is wrong, because food is "for profit" and it's not perfect, but the market forces the big retailers to work with 2-4% margin. Hospitals aren't like that. For profit hospitals work with 14% average operating profit margin (3-5 times higher) because of the regulated industry.
This is a classical microeconomics problem of supply and demand. Markets are good at that to drive the price down. For people who can't afford it the government may redistribute the taxes from the healthy people to pay for treatment. The cheaper is the treatment, the better it will be for all.
While it is something of a trope, I'm not sure I want to be (or would be able to do so) doing price comparisons between hospitals (or ambulances for that matter) as my internal organs ooze onto the pavement after being struck by a semi truck and dragged 40 meters.
That's the primary issue with using price signals in a healthcare setting. Especially in a system where the recipient of services doesn't actually pay the total costs out-of-pocket for those services.
Which creates perverse incentives for both the payer and the provider.
And since that's not likely to change anytime soon, a single-payer system makes a lot of sense.
Non-emergency treatment/care not related to any emergency care would definitely benefit from increased supply and more information.
What, specific regulations would you like to see removed from hospital settings? I want to emphasize that this is not a rhetorical question.
For drug prices, the current system is also very, very broken. Remove the PBMs from the drug supply and at least there allow for market forces to work.
It's a classical problem of resource allocation that can't be avoided with just good intentions. Medical tourism in countries like Israel & Thailand shows that this can be allocated through market forces.
>For drug prices, the current system is also very, very broken. Remove the PBMs from the drug supply and at least there allow for market forces to work.
Sadly, the current government seems set on thwarting those suggestions.
>It's a classical problem of resource allocation that can't be avoided with just good intentions. Medical tourism in countries like Israel & Thailand shows that this can be allocated through market forces.
Where are you seeing anyone even paying lip service to some nebulous idea of "good intentions?"
While I agree that market forces can be useful in certain situations (cf. Germany, Japan, and others), but basic health care, emergency services, life-saving care and a raft of other services aren't improved with to a race to the bottom.
https://en.wikipedia.org/wiki/Frances_Oldham_Kelsey would like a word.
(She saved the US from thalidomide's birth defects, despite European and Canadian approvals and a whole lot of industry pressure.)
Market forces don't work for medical for many reasons. It begins with paying the shareholders dividends. That money should go to medical care. Same with C-suite compensation. Every time I hear of a medical system executive getting tens of millions of dollars in compensation, I think, "How many people could get medical care for that money?" $1 million in compensation is roughly equivalent to the annual healthcare premium for 65 people.
Then you have specialized clinics, such as MRIs or ENTs, which also have to generate their profits and pay their shareholders and CEOs. I'm reminded of the time I had to see a gastroenterologist, and the place I was recommended was an extremely well-furnished, high-priced luxury office, with a 15-foot-wide, 8-foot-tall aquarium filled with cichlids. Why were they pissing money away on fancy furnishings and an expensive-to-buy and maintain aquarium instead of using the money to take care of patients?
We have sufficient experience with financial engineering in other industries to know that applying financial rules to the medical environment is likely to result in worse patient outcomes and a higher concentration of wealth for a few.
I think that every market needs regulation to work well. Different rules for different markets, but they need regulation to keep participants on relatively equal footing, for example to avoid cartels.
If you outlaw sale and lease back, businesses and hospitals will fail sooner, but with their real estate intact. At least until they figure out that they could move into a rental and sell their existing facility, but moving facilities is very expensive for hospitals, so they'll probably not be able to afford that.
For hospitals, especially rural hospitals, I think trying to run them for economic gain just doesn't work. They're expensive, they have obligations to provide expensive care without promise of payment in many cases. Municipal hospitals seem to make a lot of sense to me, although the same communities that are having trouble with hospitals failing would likely have trouble paying for a municipal hospital as well.
In current day America it doesn't seem like anything useful is compatible with making money. From the outside, it looks like you've entirely divorced money from common good.
It is possible to make hospitals profitable, but it requires you to take control over what sorts of things you wish to make a profit.
Sears was clearly failing. Asset stripping turned a slowly failing company into a company operating normally for a period of time until it became a failed company all at once. The alternative to asset stripping would be Sears either selling off stores in chunks until it figured out how to operate profitably or became small enough to acquire; or Sears closing stores and renting them to others. Both of those strategies are hard to execute on, especially with Sears shaped stores, nobody is looking to expand into that at the scale that Sears needed to shrink.
But, for a single location hospital, you can't continue operation and let someone else use the building. If someone wants to take over operating as a hospital, that's fine... but if the hospital is consistently losing money, who wants to take over operating it? So, sell and lease back lets you keep running for a while longer.
The problem is hospitals run for profit don’t make sense. The profit motive is the problem. Not how it is pursued.
13 Million people about to lose insurance
and ACA premiums about to double so people will drop that too to buy food/rent
means America is returning to emergency-room as primary care with unpaid massive bills so many, many hospitals will close
We're basically going to ride this broken system into the ground
ie. bridges are never repaired in USA until they completely collapse
Buying up property then leasing it back is straight from the private equity playbook. It almost always ends badly. And it's driving up the cost of everything. Hospitals, vets, housing, etc.
At some point you have to realize that the only innovation under capitalism is building enclosures and rent-seeking.
Whereas in China, a command economy, they've built 20,000km+ of high speed rail in <20 years and just unveiled a 600kmh maglev train (note: that's faster than commercial aircraft) that will go from beijing to Shangai, over 1000km, in 2.5 hours.
The US government, regardless of party, operates to transfer wealth from the young and poor to the old and wealthy, and the "old" part is on shaky ground. And it can't go on like this.
I think by 2100 we'll see a collapse of this system, the kind that ends in land reform, guillotines, nationalization and sovereign debt default.
[1]: https://www.healthsystemtracker.org/chart-collection/health-...
[2]: https://www.commonwealthfund.org/publications/issue-briefs/2...
Also: on the topic of same-day visits because I think there's some confusion here. American can, maybe, get same-day visits if and only if they have a PCP, which is increasingly rare.
Your PCP cannot do jack fucking shit. At best, they can swab your throat. Every type of condition management outside of Strep MUST go to a specialist. Your tummy been hurting a lot? That's a job for a gastroenterologist, not your PCP.
For specialists, it's not uncommon to wait many months or even a year. Especially because most insurance plans require a referral - so you have to see two doctors.
As one counterexample, there is a statistically significant spike in cancer diagnoses in the US at age 65 [1]. Why? Because people are on Medicare then so they finally go see a doctor.
Another: the US is the worst for wait times [2].
The US has almost the lowest rate of annual doctor visits of any country, in large part due to lack of access and cost [3].
[1]: https://med.stanford.edu/news/all-news/2021/03/Cancer-diagno...
[2]: https://worldpopulationreview.com/country-rankings/health-ca...
[3]: https://www.visualcapitalist.com/ranked-how-often-people-go-...
The patient might prefer to pay less out of pocket, but they often aren't presented with cost information until a month after the service. Often nobody can tell you how much something costs before hand. Anyway, there is incentive to get more covered care, because insurance is paying for most of it.
Insurance companies are generally limited on administrative costs and profit to a % of medical costs. More costs allowd them to pay higher executive salaries and profits. Insurance companies do have a cost control function, but the incentive isn't there to do it well.
Individual practitioners and medicial facilities and facility groups have incentive to bill more things.
People paying for the insurance, which is often employers, do have cost control incentives, but things are pretty murky at that level.
Somewhere in all of those costs, we're paying for an army of billing specialists and an army of claims handlers.
Throwing out insurance and moving to billing at time of service would be terrible for access but it would make cost control a lot more possible. Single payer systems can make cost control possible too, if the single payer system is able to do analysis and effectively set policies to avoid things that are not cost effective, and curtail billing abuses... Of course, nobody likes it when cost control says the thing they want to do isn't cost effective and they can't do it.
Why don't you think of the poor anesthesiologists, hospital admins and insurance execs?
Those yachts and 2nd vacation homes won't buy themselves.
It's less because China is a command economy (ie. the government determines the allocation of capital), and more to do with the fact that it's an authoritarian state where the local population and interest groups basically has zero ability to object/block construction projects.
That said, the Chinese state is also doing this by spending a lot of money on infrastructure. This isn't unlike what the west did when everybody got electricity, phone lines, clean water, sewers, heating, and things like bridges and infrastructure. Of course the government helped rollout of rail infrastructure in populated areas by creating the necessary laws and ordinances (less populated land was still cheap enough that companies could just buy land). That approach worked fine, until populations grew so there was less cheap land and property became a method of investment that drove up prices to a ridiculous degree.
My country's rail network has been reduced to the essentials, after several mergers and services that became unprofitable were shut down (despite them working fine as independent companies). Building new rail now takes decades of negotiations instead of a few years of laying tracks, if funding can even be secured, as politicians seem to hate the idea of investing in public transport when we could add Just One More Land. The entire system has been clogged.
The authoritarian system is one way to work around the problems of modern high-density society, but it's not necessarily the only way. The trouble lies in convincing enough people to accept the downsides, and to stop the greedy fraudsters from bleeding any development plan dry in any way they can.
Does it really need to be stated that this is propaganda? Really? Are we to believe that these people are worried about the rights of poor patients in the US?