Private Equity's Deadly Takeover

If private equity owns your hospital, what happens next?

No matter your zip code, or your area code—no matter your insurance card– when private equity remakes healthcare into a profit engine, you are on the chopping block.

In this system, where the boardroom meets bedside manner…we’re all just profit margins waiting to be squeezed, even the doctors.

And when it comes to be your time, the healthcare system will show you– people are the product.

00:00:00:03 - 00:00:09:19

Nick Valencia

No matter your zip code or your area code, no matter whether you have an insurance card, when private equity remakes health care into a profit engine, you are on the chopping block.

00:00:09:21 - 00:00:23:04

Jessica Malaty Rivera

If we actually lived in a country that cared about health as an inherent right, and we provided fair and affordable access to health care, I think it would answer a lot of problems.

00:00:23:09 - 00:00:36:17

Nick Valencia

In this system where the boardroom meets bedside manner, we’re all just profit margins waiting to be squeezed. Even the doctors. And when it comes to be your time, the health care system will show you people are the product.

00:00:36:18 - 00:00:41:17

Jessica Malaty Rivera

For profit companies come in and really sabotage the experience for a lot of people.

00:00:41:21 - 00:01:05:27

Nick Valencia

We hear it all the time. Our health care system is broken. Sure we know, but why? And no, it’s not just as simple as blaming the insurance companies. That’s a big part of it. Sure. But the truth is far more complicated. With private equity backed health care firms, at first what looks like a fight between patients and insurers is also a struggle between insurers and the hospital systems.

00:01:06:04 - 00:01:08:16

Nick Valencia

And the battle is always over profit margin.

00:01:08:23 - 00:01:24:19

Jessica Malaty Rivera

It’s becoming more popular. I live in the San Francisco Bay area, where every other person is in private equity at this point. It’s a pretty big amalgamation of financiers and health folks.

00:01:24:21 - 00:01:43:02

Nick Valencia

And when that private equity boardroom logic enters health care, guess who stuck in the middle? This isn’t just a working class problem. It’s an every class that can’t put their name on the side of a building problem. The US health care system is presented to us as a world where patients are simply trying to get care, and doctors are trying their best to provide it.

00:01:43:05 - 00:01:53:05

Nick Valencia

The reality, though, is far more grim. It’s a system where decisions about care are often shaped not by moral servitude, but by financial pressures far above the health care providers.

00:01:53:11 - 00:02:12:09

Becky Tennant

Eric’s oncologist was very frustrated, and he and I had many conversations about it. And he’s trying and he says, “this is what I need for my patient.” But somebody else who doesn’t even know the patient is making the decision. They, you know, don’t care if you live or die is sometimes how it felt.

00:02:12:12 - 00:02:34:29

Nick Valencia

As you’ll learn in our reporting, some doctors could have kept fighting instead of selling their practices to private equity firms. But fighting requires time and money and leverage. Things individual doctors don’t often have when they’re up against billion dollar systems. This is a story about what happens when health care is reorganized around financial extraction. Wall Street is no longer just investing in health care.

00:02:35:02 - 00:02:45:02

Nick Valencia

It’s helping reshape the system itself. I’m Nick Valencia, and this is Corruption Inc: The American Way.

00:02:45:04 - 00:03:07:11

Nick Valencia

When health care is turned over to financial actors whose incentive is money, the system stops serving patients like you and me and starts serving deals. Take, for example, the story of Luigi Mangione and the killing of UnitedHealthCare CEO Brian Thompson. When Thompson was shot and killed in broad daylight in New York, there were many Americans, especially online, who weren’t all that upset about it.

00:03:07:14 - 00:03:14:24

Nick Valencia

For others, there wasn’t only justification. There was a celebration. One doctor I spoke to explained the phenomenon like this.

00:03:14:26 - 00:03:47:26

Dhaval Desai

You know, first and foremost, I don’t condone violence. I don’t like that he died. He was a father. He was a son. He was all the things that you and I are, and I don’t like that he died. However, the feelings and emotions that people feel that the industry… that sent a message about the industry. And that’s powerful because countless Americans, thousands upon thousands, have been hurt by these insurance companies who dictate what they think the patient needs, dictate what doctors order, what’s being reimbursed, keep trying to push them more with less.

00:03:47:29 - 00:04:12:12

Dhaval Desai

Meanwhile, insurance executives are getting paid millions of dollars. Millions. And this is not about doctors trying to get richer or make more money or any of that. But at the end of the day, there’s a certain… a very business aspect where these executives are just raking in all the dollars. And ultimately these frontline patients and health care workers are the ones suffering.

00:04:12:13 - 00:04:36:00

Nick Valencia

The point isn’t that Americans have become uniquely cruel. The point is that a remarkable number of people seem emotionally detached from the suffering of a health care executive. It’s because they’ve come to see the health care system as emotionally detached from them. In a recent report on how private equity is investing in health care, KFF health interviewed Johns Hopkins health care economist Yashaswini Singh, who explained it like this:

00:04:36:00 - 00:04:55:29

Yashaswini Singh

Private equity is but one symptom of a larger trend in the corporatization of medicine in the United States. There’s been a longstanding tension between medicine as a profession and health care as a business. The key concern has always been that business obligations to shareholders might not align with physician obligations to patients.

00:04:56:00 - 00:05:15:21

Nick Valencia

Listen to what you just said closely. Not always align with the care we need. Let’s be clear. Private equity has one job. Buy something, make it look more valuable, and sell it for money. That’s it. No, not heal more people. Not make care better. Make more money. What happened to do no harm. This all plays a role in the reaction we saw to Mangini.

00:05:15:21 - 00:05:45:01

Nick Valencia

The Mangione phenomenon, the jokes, the indifference, the dark satisfaction in some corners. It was ugly and it was also revealing of a symptom. And the people are telling us something. They’re telling us that they see themselves less as citizens and more as products moving through a marketplace. They’re telling us that health care is one of the most intimate parts of their life, and it’s increasingly becoming like a negotiation with institutions that do not know them and are not designed to care.

00:05:45:03 - 00:06:06:29

Nick Valencia

Our health care system isn’t broken. It’s working exactly how it was designed, just not for you. Just listen to the story of Eric Tenant. Eric Tenant’s story is one you might think couldn’t happen to someone with insurance. Diagnosed with liver cancer, his doctors recommended a cutting edge, minimally invasive procedure called a histotripsy. His doctors did what they were supposed to do.

00:06:07:01 - 00:06:24:13

Nick Valencia

They identified a treatment that could help. But his insurer denied coverage repeatedly, and with each denial letter, a little more hope was chipped away. This is the gap between medicine and the system that now surrounds it, where a doctor can recommend care, but someone else gets to decide if you receive it.

00:06:24:13 - 00:06:48:15

Becky Tennant

Because of our health insurance, they wanted us to stay in the state. Which is fine, but we’re West Virginia and you know, sometimes there are better doctors. And that’s why our doctor wanted us to go to the Cleveland Clinic, to the GI doctors there, because they do have a good reputation and and see what was going on.

00:06:48:19 - 00:07:10:27

Becky Tennant

So we had to go through the whole process of getting that approved. That went into December. In just the end of December, we went and took our kids to Mexico for Christmas. And he wasn’t feeling good when we were in Mexico. His stomach and his back were hurting and he just could hardly get out of bed.

00:07:10:28 - 00:07:36:00

Becky Tennant

And when we got back, before the new year, I’d called our doctor and I said, “we can’t wait.” The way the insurance had it was we had to see a GI doctor here in West Virginia, and then they had to refer us to the GI specialists at Cleveland Clinic. So that appointment was August, which, you know, was nine months from when the appointment was made.

00:07:36:01 - 00:07:58:18

Becky Tennant

So I told our doctor, I said, “we can’t wait. I don’t care who we see if it’s a PA, a nurse, a nurse, I don’t care.” So they got us in with a PA and they did a Cat scan before our appointment with them, and that came back with a mass in his liver. And they were like, “you know, this is something completely different than what we thought.”

00:07:58:21 - 00:08:23:02

Nick Valencia

In the end, Eric Tennant didn’t lose to his disease alone. He lost to a system that delayed the care he needed. He died. But his story lives as a stark reminder of how denial works. Not in theory, but in practice. While his insurer denied his treatment, the culture driving these decisions comes from a chain of incentives, one that has been intensified by private equity focused on cost control, efficiency and returns.

00:08:23:04 - 00:08:44:07

Nick Valencia

Some doctors do push back. They appeal. They advocate. They fight for their patients in ways people never see. But they’re doing it inside a system where the final decision often doesn’t belong to them. We’ve long been told that it’s the poor and the marginalized who bear the brunt of a broken system. And yes, they do. But here’s the wakeup call.

00:08:44:10 - 00:08:56:12

Nick Valencia

It’s all of us. In 2024, the dean of the School of Public Health at Brown University wrote an op ed about how private equity is disrupting the health care system in America. Ashish Jha spoke about it in a recent interview with Christiane Amanpour.

00:08:56:19 - 00:09:13:02

Ashish Jha

Private equity firms look at the end of the day during and for one reason or one reason only, which is that they’re trying to make money out of this. And their strategy generally has been short term, come in a few years, turn it around. And when I say turn it around, I don’t mean it’s really turned the health system around.

00:09:13:03 - 00:09:40:16

Dhaval Desai

What I mean is then flip it, sell it to somebody else, make a profit. But often that has real negative effects on the system they bought, whether it was a hospital, a doctor’s office, nursing home. So it leaves that community often much worse off, even though that private equity firm made a very nice profit out of it. Now we’re seeing emerging evidence, at least on the hospital sector, that when private equity buys up hospitals, health care outcomes for patients in those hospitals may actually get worse.

00:09:40:16 - 00:09:54:23

Dhaval Desai

So that’s obviously very concerning. This is really a very big phenomenon with a large entry of private equity firms into the health care marketplace.

00:09:54:23 - 00:09:55:26

Hari Sreenivasan

There are a lot of towns in America who see a large hospital chain.

00:09:56:02 - 00:10:05:12

Hari Sreenivasan

Come in and take over their kind of facilities, and then there have been consequences on whether those facilities have become profitable or not. And and changes have happened.

00:10:05:19 - 00:10:28:09

Nick Valencia

And now with prior authorization, patients like Eric Tenant or their providers are required to get permission before procedures or treatment. The same denial machine that hits the vulnerable will hit the middle class too. Because right now there are people sitting in offices who will never meet you, making decisions that can change your life or end it. The system isn’t built to move fast for patients.

00:10:28:12 - 00:10:30:16

Nick Valencia

It’s built to protect the money.

00:10:30:18 - 00:10:58:22

Jessica Malaty Rivera

It is very, very myopic to think that like, “oh, money is going to solve this problem.” You know, I feel like when we are telling people, “oh, if we just have better investment in these things…” No, like for profit businesses, for profit outcomes here is how we have health disparities to begin with, because it’s what pushes people with different spending capacity, more and more apart.

00:10:58:23 - 00:11:15:29

Jessica Malaty Rivera

You know, a health care that follows profitability means a health care that leads to sicker populations. And we’re just kind of like letting it happen because of capitalism. Like at the end of the day, is it just because we have a free market system here and people can just invest how they want it? Like there’s no way that it can just be.

00:11:16:06 - 00:11:18:10

Jessica Malaty Rivera

“It is what it is.”

00:11:18:12 - 00:11:29:04

Nick Valencia

In America, you can have insurance. You can have a doctor. You can even have a treatment and still be told to wait. And you had an insurance card. You had insurance paid for.

00:11:29:04 - 00:11:57:00

Becky Tennant

We paid a lot for our health insurance. We paid roughly probably 13 to $15,000 a year was our portion, which is still a lot. I mean, you know, we both worked, we were fortunate that we had money in our savings account. We talked about taking money out of his 401 K. He was very much against that because one, he knew the r eality of his cancer.

00:11:57:00 - 00:12:17:23

Becky Tennant

You know, histotripsy was not going to cure him. It was just going to hopefully buy him time. We don’t know that because they took that opportunity for us to know away. But also he was like, “I, I’m working. I’m paying for health insurance. Why should I have to?” You know, and we were willing to pay part of it.

00:12:18:00 - 00:12:42:09

Becky Tennant

You know, we don’t expect them to just give us a free ride. To begin with, the first denial was it wasn’t medically necessary, which is a general denial that most people get with something like this. The second denial was the same thing. The third was it’s not FDA approved or it’s considered experimental. Well, it is FDA approved and it is not considered experimental.

00:12:42:10 - 00:13:06:01

Becky Tennant

But the code that they were using is that’s what it was showing. On the other side, they approved chemo after chemo after chemo. You know, Eric was on chemo for two and a half years straight, but they always approved the chemo. So it’s like, do they want him to die or do they want him just to stay on chemo?

00:13:06:03 - 00:13:31:12

Nick Valencia

Eric’s story is the starkest example of a system reshaped by private equity, but it’s not the only one. Christopher McNaughton was battling ulcerative colitis. He finally found a treatment that worked only to have UnitedHealthCare reject the claim. Just another example of how the internal rejection processes operate. Drew Calver, a teacher. He had insurance too, but still faced a massive surprise bill. Sharon McKee in Oklahoma,

00:13:31:19 - 00:13:44:03

Nick Valencia

Sharon McKee in Oklahoma, she faced lawsuits over small balances showing how the system litigates people into submission. Even a kindergartner’s eye surgery was initially denied, leaving the family to fight through appeals before public pressure intervened.

00:13:44:09 - 00:13:47:19

Cara Anthony

Chloe Jones was born with a droopy eyelid, a condition known as pertussis.

00:13:47:19 - 00:14:04:01

Keyanna Jones

For kids, it can interfere with their vision. Chloe has an astigmatism that she had glasses for, so we didn’t want any extra issues. At first it showed that they billed it as out of network. So I thought, oh, it’s just a mistake. Mistakes happen.

00:14:04:01 - 00:14:11:20

Cara Anthony

But when Kiana contacted the insurer, the representatives told her they had no record of agreeing to cover the surgery as in-network.

00:14:11:21 - 00:14:16:01

Cara Anthony

In its prior authorization letter, the insurer said only that it would cover her surgery without offering network discounts. Kiana contacted State Senator Travis Fitzwater, who represented Chloe’s district. Kiana also filed a complaint with the Missouri Attorney General. Soon after, both the hospital and the insurer contacted Kiana.

00:14:30:00 - 00:14:37:28

Keyanna Jones

I got an EOB that said I owed nothing, no co-pay, no anything.

00:14:38:01 - 00:15:02:07

Nick Valencia

In each case, these are people who did what society expects they paid into the system. They secured insurance, and they trusted that help would be there. Yet they found themselves locked in battles they never should have had to fight. Battles were that lost time, meant health lost. It’s a system where denial isn’t just incidental. It’s baked into a structure where financial returns are prioritized over patient outcomes.

00:15:02:10 - 00:15:24:02

Nick Valencia

In the end, each denial, each lawsuit, each surprise bill is part of the same through line. When private equity shapes health care, the system is designed to say no because denial is profitable and deadly. The nature of private equity itself has serious implications for health care, and nowhere is that cautionary tale more evident than in the story of Stewart Health Care, a for profit system formerly owned by a private equity firm.

00:15:24:02 - 00:15:48:23

Nick Valencia

In March 2024, it sold nine hospitals in Massachusetts. At the time of chapter 11, Stewart had more than 2 million patients, 31 hospitals and 400 facilities, as well as 30,000 employees across eight states. And amid the bankruptcy proceedings, Ralph de la Torre, the CEO behind it all, was reportedly watching the Olympics in Versailles.

00:15:48:26 - 00:16:11:18

Nick Valencia

The financial fallout of it all is still being felt today across the country. Before Stewart was Stewart, it was a Catholic health care system called Caritas Christi Health Care. But in late 2010, leaders agreed to sell the six hospital system to a New York private equity firm, Cerebus Capital Management, for nearly $900 million. Loan Hospitals Index shows that many of the hospitals in the system were serving an important community need.

00:16:11:19 - 00:16:45:13

Nick Valencia

All of Stewart’s hospitals in Massachusetts, for instance, received either A or B grades in both community benefit and inclusivity. In 2024, according to Stewart, 70% of hospital patients were covered by Medicare and Medicaid. Despite its financial struggles in 2011 and 2012, Stewart bought five more hospitals. Then in 2016, the system drew the attention of a new buyer, and was bought out in a $1.3 billion acquisition by a real estate investment trust, Medical Properties Trust , MPT, which currently owns 171 acute care facilities across the US.

00:16:45:14 - 00:17:09:07

Nick Valencia

The system quickly grew to 36 hospitals in ten states, and in 2018, Stewart moved its headquarters to Dallas, presumably to avoid some of Massachusetts stricter regulations. Brookings found the health system was facing around 130 lawsuits over unpaid bills. And the way that the states and federal government regulate means that the problems were not caught in time to prevent the system from collapsing.

00:17:09:09 - 00:17:33:14

Nick Valencia

Stewart’s financial challenges were in part due to the fact that the health system’s expansion was large and rapid. The hospitals weren’t functioning with enough money, and this lack of money coincided with patient complications. In one instance, a new mother died from internal bleeding that wasn’t caught because Stewart didn’t have certain equipment at the hospital. The equipment had been repossessed due to unpaid bills.

00:17:33:17 - 00:18:02:23

Nick Valencia

As the health system floundered financially, the company’s CEO, Ralph de la Torre, had two multimillion dollar yachts and made 3.8 million from May 2023 to April 2024. And frankly, the optics weren’t great. The downfall of Stewart inspired lawmakers to create more regulations to keep hospitals operational. Elected officials went into action, with Massachusetts Governor Maura Healey sending the system in February 2024 an ultimatum accusing it of not being forthcoming, truthful or responsive about its financial status.

00:18:02:24 - 00:18:34:21

Nick Valencia

About six months later, federal leaders hosted a congressional hearing with de la Torre, which de la Torre did not attend. Meanwhile, the Massachusetts legislature passed a bill to further regulate private equity in the state, signed into law by Healey in January. It requires more financial reporting from hospitals and stricter penalties if they don’t comply. At the federal level, Senator Ed Markey and Senator Elizabeth Warren introduced a new bill in June 2024 to create criminal penalties for executives who loot health systems and to require hospitals to share more financial information.

00:18:34:24 - 00:18:57:15

Nick Valencia

Though it hasn’t seen much movement. There is always a justification. Private equity isn’t the villain. It’s the lifeline to a struggling hospital or a failing system. It’s the remedy to rising costs and comes dressed in the language of a rescue. Necessity and pragmatism. Chris Wilson, a partner at Goodwin and co-chair of its health care private equity group, makes the case plainly.

00:18:57:18 - 00:19:09:25

Nick Valencia

Hospitals are expensive to run, hard to fix and risky to save. In that environment, private capital, he argues, isn’t predatory. It’s essential, he said, as much in a recent workplace promo interview.

00:19:09:27 - 00:19:36:05

Chris Wilson

What is unique and exciting about our health care practice? I think the growth of our health care practice and our firms embracing of it and treating it as a foundational pillar of our go forward strategy is essential to this firm achieving its ambitions. You look at the health care vertical on a global basis. It’s 10 trillion and growing.

00:19:36:08 - 00:20:04:07

Dhaval Desai

There is not a single life on this planet that isn’t impacted in some way, shape or form by health care. And correspondingly, the level of spend, the level of need, is not going to go away. And it’s going to continue to increase. So I see our firm and our health care practice on parallel tracks, and I think the success of the two are inextricably linked.

00:20:04:12 - 00:20:36:05

Nick Valencia

There you have it. Wilson makes the case that private equity firms are often misunderstood, not short sighted, not purely extractive. Their goals, he insists, are aligned with the institutions they invest in, care for patients and, yes, make money. Because in a world where public funding is uncertain or shrinking, the logic follows. If the government pulls back, someone has to step in and private capital is ready, not just to sustain the system, but to modernize it and to pay the costs it takes to innovate.

00:20:36:08 - 00:21:01:06

Nick Valencia

So the health care system stays alive. The argument is compelling, and it lands. Especially in moments of scarcity when hospitals are closing, budgets are tightening, and communities are being told there are no other options. But embedded in that promise is a quieter shift. It should be said out loud. Health care is no longer just a public good. It’s an asset to be managed and a new market for private equity.

00:21:01:08 - 00:21:22:07

Nick Valencia

This is a story about what happens when a group of emergency room doctors can’t afford to fight back against big insurance. And what happens when private equity reshapes emergency care? We detail how private equity leverages residency programs flooding the market to lower physician pay. Let’s take you inside the private equity machine to show you how corporations captured the emergency room.

00:21:22:09 - 00:21:42:22

Nick Valencia

We’ll use what happened in Atlanta in 2017 as an example of what’s happening across the country. Until 2017, the E.R. physicians at three Northside hospitals in the Atlanta area Northside, Atlanta, Forsyth and Cherokee were independently owned by about 100 doctors in a private group running their own shop. Then United Health Care decided to not pay.

00:21:42:27 - 00:22:03:07

Anonymous Source

So for a full year, a year and a half, they paid no charges. No charges from these three hospitals. There was about $3 million that they were unable to collect from the emergency. Just know no actual real answer as to why they didn’t do it. They just said, “no, we’re not gonna pay this.”

00:22:03:09 - 00:22:20:00

Nick Valencia

A private group of doctors cannot afford a lawsuit against one of the largest insurers in America. They didn’t have the war chest. Some of the older physicians were looking to retire. And so they did what more and more physician groups across the U.S. have been forced to do. They sold to private equity and got out of health care altogether.

00:22:20:02 - 00:22:28:24

Nick Valencia

It gave way to a place like Envision Health Care, one of the country’s largest private equity backed staffing companies, to swoop in. If health care wasn’t big business before, it sure is now.

00:22:28:29 - 00:22:48:24

Anonymous Source

So you got to sell to a private equity company in order to afford a lawsuit against an insurer that won’t pay the funds to the E.R. for their general bills. And I think Envision just recently got the payout from United Health Care from 2017 or 2016.

00:22:48:26 - 00:22:52:20

Nick Valencia

How did they have the money to last that long? Right. I mean.

00:22:52:23 - 00:22:55:29

Anonymous Source

Well, we we didn’t, which is why they sold to Envision.

00:22:56:02 - 00:23:13:19

Nick Valencia

The cycle works like this. An insurance company refuses to pay doctors. The doctors can’t afford to fight. So they sell their practice to private equity, which can afford to fight because it has billions of dollars behind it. And now private equity owns the E.R.. And what does private equity do once it’s inside? It does what private equity always does.

00:23:13:22 - 00:23:41:02

Nick Valencia

It extracts. In Oregon. Apollo, MD, an Atlanta based private equity backed staffing company, recently won a hospital contract and began flying its own physicians, displacing 45 local E.R. doctors who would serve that community. Doctors who had formed relationships with their patients and gave that personal touch. Now, not only are they out of a job, the doctors who replace them don’t even live in the same state, let alone zip code.

00:23:41:05 - 00:24:07:01

Anonymous Source

Every everyone of these groups it seems like goes through one of these where they have won the contract, and they take over and they start to like… you know they look real bad. And honestly it is a bad look. It doesn’t look great when you get a bunch of people that are native to the area that have been working for a place for a long period of time, and the hospital system decides to go with some other group entirely and switch over completely.

00:24:07:01 - 00:24:17:20

Nick Valencia

But the extraction doesn’t stop at contracts. Private equity discovered something else. They can get the government to pay to train doctors and drive down their value while they pocket the difference.

00:24:17:22 - 00:24:51:25

Anonymous Source

In the past, I think ten years, there’s a whole bunch of new ER programs that came up. And a lot of them were actually started by groups like Apollo or Infusion or King Health, these big conglomerate groups that looked at the the economics and said, “hey, look, we can get a trauma center on board here and we can staff it with residents and we can have the government pay for their training, and we could just rake in the cash.”

00:24:51:27 - 00:25:15:28

Nick Valencia

Before anyone caught on, they’d created hundreds of new residency spots. And now we’re heading toward a surplus of emergency room physicians. Which helps their bottom line, because if they have more doctors, there’s less demand. And they can lower salaries. M ore doctors, less leverage, lower pay. The people who save your life in the E.R. are having their profession hollowed out by the very companies that employ them in emergency medicine.

00:25:15:28 - 00:25:42:21

Nick Valencia

Private equity backed staffing companies such as Envision and Team Health became major players. These firms drew scrutiny for surprise billing and aggressive financial tactics before the No Surprises Act changed the landscape. Elsewhere, private equity has bought practices in dermatology, gastroenterology, ophthalmology and women’s health, often promising efficiency and scale. Tell me what you know as you see it here with private equity infiltrating the healthcare system.

00:25:42:24 - 00:26:02:17

Dhaval Desai

I think it’s a very attractive model to the private equity industries because health care always will have a demand. So the idea is they can scoop up the mom and pop small practices who are trying to survive but can’t in this world of competitive health care, as well as the fact that reimbursements are going down and you just can’t sustain running a business on your own in the current model.

00:26:02:20 - 00:26:18:04

Dhaval Desai

And they see that they can scoop up these small practices and merge them into a big system and then focus on all the things that they want to do: scaling, seeing more patients, more volume, making the health care workers do more with less, change staffing ratios.

00:26:18:05 - 00:26:27:22

Nick Valencia

Not every investment starts with bad intentions. Some are framed as rescues. Keeping clinics open. Expanding access. Stepping in where public funding falls short.

00:26:27:25 - 00:26:42:21

Jessica Malaty Rivera

I do know that a lot of health care facilities and health care groups have had, you know, years and years of pretty unmanageable debt, which is basically a big invitation for private equity to come in and buy that debt at a good value. I mean, because.

00:26:42:26 - 00:26:50:24

Nick Valencia

I mean, because people think of it like as sort of this vulture-like approach, you know, they’re preying on health care systems.

00:26:50:27 - 00:27:09:25

Jessica Malaty Rivera

You know, in a sentence, Medicare for all. Now, will that be a very difficult to do in our hyper capitalistic society? Yes. Nobody is saying it’s going to be like an easy transition from, like, the way we have it now to a system that is much more equitable. It’ll affect our tax structure. It will affect our, you know, personalized care structure.

00:27:09:26 - 00:27:28:06

Jessica Malaty Rivera

Like it will be a rough transition. But if we had something like that and there have been a number of case studies and books written about how this actually is feasible for America, again, as a public health person, I think that that’s what we should be putting our efforts towards. Not trying to fix it with more money, but try to fix it with more equity.

00:27:28:11 - 00:27:52:05

Nick Valencia

Even well-intentioned capital enters a system that rewards returns, and over time, those incentives have a way of shaping the care itself. In clinical research, the incentives are no different, but no less revealing. These firms make money regardless of whether a drug works. The revenue is based on running the trial, not the drug success that matters because speed has value.

00:27:52:07 - 00:28:21:03

Nick Valencia

If a drug reaches the market even a few months earlier, the manufacturer can make hundreds of millions more in revenue. The faster the trial finishes, the sooner the payoff. The incentive is not subtle. The result is a health care system with more and more profit centers interacting at once. Insurers trying to suppress costs, hospital systems trying to maximize reimbursement, private equity trying to increase margins, and vendors trying to accelerate volume.

00:28:21:05 - 00:28:43:16

Nick Valencia

The doctor I spoke to said one of the most common complaints he hears from patients is confusion over layered billing. The hospital bill, then a separate physician bill, then additional procedure charges depending on what was done in the E.R. A patient may think they already paid. Then another bill arrives. The paperwork technically disclosed it, but understanding it in real time is another matter entirely.

00:28:43:24 - 00:29:05:26

Nick Valencia

Our health care system allows different profit centers to interact, and the incentives at each step push towards less care for me and you. And faster throughput, higher margins for them. When those incentives stack together, patients like Eric Tennant can fall through the cracks. A private equity firm didn’t deny his claims directly, but the culture they’ve created around health care certainly didn’t help.

00:29:05:27 - 00:29:26:18

Nick Valencia

An NBC news investigation into the Cleveland Clinic - Yes, that Cleveland Clinic - which is ranked among the top hospitals in the world, found that patients have been receiving unexpected bills from doctor’s offices under its umbrella. The new costs were listed as facility fees or charges that hospitals only used to apply to people with inpatient stays and emergency room visits.

00:29:26:21 - 00:30:05:12

Nick Valencia

As major health care systems snap up increasing numbers of doctor’s offices, more people are being charged these fees for routine appointments in outpatient clinics. The Cleveland Clinic defended the facility fees, saying that they align with government regulations and industry guidelines and that they aren’t the only hospital that charges them. According to AHIP, a national advocacy group for health care insurance providers formerly known as America’s Health Insurance Plans, said, quote, “as hospitals gain more market power by snapping up doctors practices, they can control referrals and demand higher prices, which in turn makes premiums and costs for everyone higher.”

00:30:05:14 - 00:30:30:18

Nick Valencia

Independent medical practices and freestanding medical facilities, which typically offer much lower pricing, find it harder to compete with the large hospitals and health care systems. The result is some physicians taking early retirement or selling their practices to the large health care systems. No more personal touch. The American health care system still contains extraordinary doctors, nurses, researchers, and, of course, caregivers.

00:30:30:20 - 00:30:50:20

Nick Valencia

Many of them are working furiously inside institutions that make their jobs harder every year. We don’t think about the investment that the doctors are making to write. I mean, a school costs a lot. These programs cost a lot. You’re in it for a long time and don’t get paid much until you do. And then you have to pay back a lot of the debt that you may have accumulated trying to trying to get there.

00:30:50:20 - 00:31:10:13

Nick Valencia

And so it may be financially attractive when eventually someone like a private equity firm comes in and says, hey, let me take care of these financial problems for you. Do you blame the doctors for taking these chances? I mean, I guess we could say, “hey, you could stick in and and fight this out,” but, I mean, what are your chances when you’re fighting against somebody like United Care and Big Insurance?

00:31:10:15 - 00:31:36:10

Nick Valencia

The institutions themselves are changing. When insurers suppress payment providers consolidate, when providers consolidate, communities lose access when smaller groups can’t afford to survive, private equity buys them. When private equity buys them, labor gets cheaper. Margins get tighter and care becomes more about extraction. Insurance companies got too powerful. Hospitals grew larger to survive. Private equity rushed into the wreckage.

00:31:36:12 - 00:31:57:05

Nick Valencia

Now, as my source put it, it is often private equity versus private equity with patients and providers caught in between. That’s not a slogan. It’s a diagnosis. It means there are no single levers that resets this system to something more humane. And it means by the time most Americans encounter the system and it’s worse, they’re already sick, scared, or out of options.

00:31:57:07 - 00:32:19:25

Nick Valencia

That is a terrible time to discover you were never really the customer. We spend more than any country in the world and still can’t guarantee care. For people with means, there is always another option. Concierge medicine: pay directly, pay monthly, and receive the kind of access and personal relationship that used to define the ordinary primary care. The best care in America still exists.

00:32:19:27 - 00:32:36:12

Nick Valencia

Increasingly, though, you just have to buy your way into it. The result is not just one villain. It is a chain of incentives. And when that chain tightens, ordinary people pay for it with time, with money, with trust. And yes, sometimes, unfortunately, with their lives.