Distant Dome by Gary Reino
Private enterprise and free markets may not be the answer to all our problems, as some believe.
Some companies perform better when profits aren’t the driving force behind their decisions.
Would you rather have air traffic controllers competing to see which company can achieve the lowest operating fees, or private police forces competing to see which company can bring in the most revenue?
Likewise, hospitals, and health care in general, should not be in the hands of private equity firms or for-profit conglomerates.
The nation’s largest for-profit hospital operator is looking to expand its footprint in New Hampshire with the announcement of its acquisition of a Catholic medical center.
HCA began as Health Corporation of America and was one of the first privately owned hospitals in the United States when it was founded in Nashville in 1968.
According to Wikipedia, by 2024, the company will own 186 hospitals and more than 2,000 healthcare facilities, including surgery centers, freestanding emergency rooms, urgent care centers and physician clinics, across 21 states and the United Kingdom.
Surprisingly, the majority of these facilities are located in Florida and Texas.
CMC has been in financial trouble since a proposed merger with Elliott Hospital in 1994 to form Optima Healthcare fell apart five years later over the issue of abortion and what medical services would be provided at the West Side facility.
CMC will be HCA’s fourth hospital in New Hampshire.
The company first expanded into New Hampshire in 1983 when it acquired Portsmouth Hospital and opened Parkland Medical Center in Delhi.
The Portsmouth sale was held up in court for years but was finally resolved in 2013 when the state Supreme Court sided with HCA.
Another hospital on similarly shaky financial footing to CMC, Frisbee Hospital in Rochester, was acquired by HCA in 2020 and two years later breached an agreement to maintain maternity services for five years.
Nurses at an Asheville, North Carolina, hospital acquired by HCA recently took out a full-page ad in the Union Leader urging the state of New Hampshire to reject the acquisition of CMC, arguing that the quality of emergency room and cancer care has plummeted since the acquisition, which put profits over patient health.
The North Carolina Attorney General has filed a lawsuit against hospitals seeking to improve care.
Other hospitals in New Hampshire have felt the need to partner with other larger facilities, such as the numerous hospitals under the Dartmouth-Hitchcock umbrella, Elliott and Southern New Hampshire Medical Centers that form Solution Health, Exeter Hospital, which is affiliated with Beth Israel Lahey Health, and Wentworth Douglas Hospital in Dover, which is affiliated with Massachusetts General Hospital Brigham, all of which are nonprofit, not for-profit, enterprises.
While what has already happened with for-profit HCA in New Hampshire may give the Attorney General’s office pause in considering a proposed sale of CMC, our look to the South may offer a more revealing and alarming scenario of what happens when hospitals are bought by for-profit private equity firms.
Steward Health Care was backed by private equity firm Cerberus Capital Management and resurrected in 2010 from the ashes of the Caritas Christi Catholic hospital chain, led by former heart surgeon Ralph de la Torre.
Many of the chain’s hospitals were acute care facilities, meaning they were the only hospitals providing medical services in their area.
Dallas-based Steward Healthcare filed for bankruptcy on May 6, and after months of negotiations, Massachusetts Gov. Maura Healey announced a deal last week that would see seven of Steward’s nine hospitals in the state remain open but two hospitals in Dorchester and Ayer close.
The deal also included acquiring Brighton’s flagship hospital, St. Elizabeth’s Medical Centre, owned by private equity firm Apollo Global Management, by eminent domain after negotiations over the land on which the hospital sits stalled.
The agreement also included other medical organizations taking over operations of the remaining seven hospitals.
In announcing the deal, Healy accused Steward of leaving behind a legacy of greed, mismanagement and chronic underinvestment in facilities.
“Today I am pleased to bring the Steward saga to an end in Massachusetts,” Healy said. “Goodbye, this is the end.”
The Boston Globe ran several articles about de la Torre and his lavish lifestyle, which included yachts, planes, a penthouse and extensive travel using company funds.
Torre has been heavily criticised for his involvement in Paris and the Olympics, particularly the dressage events at the opulent Palace of Versailles, while his company has filed court papers to formalise the closure of two hospitals.
But what should worry anyone who sees a doctor is that this week a bankruptcy court in Houston, Texas, approved the sale of Steward’s physician network, Stewardship Health, for $245 million to Rural Healthcare Group, a subsidiary of buyout firm Kinderhook Industries, another private equity firm.
Buyout and private equity firms are known for buying up struggling companies, stripping them of their assets and reselling the remains.
Now, I never spend more than 15 minutes with my doctor because the insurance company sets times, procedures, etc.
Now, with the private equity firms on board, that ramp-up is likely to accelerate dramatically as the company keeps its most profitable operations and divests others.
Finding a family doctor can be difficult, but there are plenty of specialists available who charge high fees.
And this privatization of the health care industry is similar to the privatization of education, for which the groundwork is already in place.
Many states, including New Hampshire, allow boutique physician offices and concierge physician practices in the name of free enterprise.
Patients pay a fee to see a doctor who has a smaller patient volume than the hospital’s affiliated physicians, and receive more personalized care without having to consider the traditional health care system’s cost-pass-through to insured patients (higher premiums for the uninsured).
If they have enough money, they can circumvent the traditional system and get better care, widening the gap between Brahmins and the rest of society.
In this new system, the wealthy don’t have to share their wealth to help those less fortunate. Sound familiar?
The Steward system was born out of Catholic hospitals’ mission to serve the underprivileged, and private investment companies were stripping them of their assets and enriching their members, while leaving those in need of medical services to rely on the mercy of Texas bankruptcy judges.
The health care system may need fixing, but Steward Disaster is not the solution.
Garry Rayno can be contacted at [email protected].
Distant Dome, by veteran journalist Garry Rayno, explores a wide range of state legislative and state events at InDepthNH.org. Rayno has covered the New Hampshire Legislature throughout his 30-year career for the New Hampshire Union-Leader and Foster’s Daily Democrat. Throughout his career, his coverage has spanned news from local planning, school and elections boards to national issues such as power industry deregulation and presidential primaries. Rayno lives in New London with his wife, Carolyn.
