By GARRY RAYNO, Distant Dome
Private enterprise and free markets may not be the answer to everything as some would have you believe.
There are some things that perform better when the bottom line is not the driving reason for corporate decisions.
Do you want air traffic controllers competing to see which company can attain the cheapest operation or private police forces seeing who can bring in the most revenue?
Likewise, hospitals and health care in general are not something you want in the hands of private equity firms or for profit conglomerates.
The largest for-profit hospital operator in the country is seeking to expand its footprint in New Hampshire with its announced purchase of Catholic Medical Center.
HCA, which began as Health Corporation of America, was one of the first private hospitals in the country when it was established in 1968 in Nashville.
According to Wikipedia, in 2024 the company owns 186 hospitals, and more than 2,000 additional care sites including surgery centers, freestanding ERs, urgent care centers, and physician clinics located in 21 states and the United Kingdom.
The vast majority of these facilities are in Florida and Texas, surprise.
CMC has had its financial issues since the proposed merger with the Elliot Hospital forming Optima Healthcare in 1994 fell apart five years later over the issue of abortions and what medical services the Westside facility would house.
CMC would be HCA’s fourth hospital in New Hampshire.
The company first entered New Hampshire in 1983 with the purchase of Portsmouth Hospital and the opening of the Parkland Medical Center in Derry.
The Portsmouth sale was held up in court for many years before finally being resolved in 2013 by the state Supreme Court siding with HCA.
Another hospital like CMC with a shaky financial foundation, Frisbie Hospital in Rochester, was purchased by HCA in 2020 and violated its agreement to retain child birthing services for five years two years later.
Nurses from an Asheville, North Carolina hospital taken over by HCA placed a full-page ad in The Union Leader recently urging New Hampshire to reject the purchase of CMC saying the quality of emergency room and cancer care plummeted after the takeover with more emphasis on the bottom line than patient health.
The North Carolina Attorney General has moved against the hospital trying to improve its care.
Other New Hampshire hospitals have found a need to affiliate with other larger facilities such as the numerous hospitals under the Dartmouth-Hitchcock umbrella, Elliot and Southern NH Medical Center forming Solution Health, Exeter Hospital’s affiliation with Beth Israel Lahey Health, and Dover’s Wentworth-Douglass Hospital is affiliated with Mass General Brigham, but those are all non-profit enterprises not for-profit companies.
While what has already occurred in New Hampshire with for-profit HCA might cause the Attorney General’s Office to pause as it reviews the proposed sale of CMC, a look to our south might offer a more revealing and concerning scenario for what can happen when hospitals are taken over by for-profit, private equity firms.
Steward Health Care rose from the ashes of The Caritas Christi chain of Catholic Hospitals in 2010 backed by private equity firm Cerberus Capital Management and led by Ralph de la Torre, a former cardiac surgeon.
Many of the hospitals in that chain were acute care facilities, meaning they were the only hospitals in their regions providing health care services.
Now Dallas-based Steward Health Care filed for bankruptcy May 6, and after months of haggling, Massachusetts Gov. Maura Healey announced a deal last week that would keep seven of Steward’s nine hospitals in that state open, while two would close in Dorchester and Ayer.
The deal included taking the flagship St Elizabeth’s Medical Center in Brighton by eminent domain after negotiations stalled over the property the hospital sits on and owned by the private equity firm Apollo Global Management.
The agreement included other health care organizations taking over operations in the seven remaining hospitals.
In announcing the deal Healey accused Steward of leaving a legacy of greed, mismanagement and chronic under investing in its facilities.
“Today, I’m pleased to say we’re closing the book on Steward once and for all in Massachusetts,” Healey said. “Good riddance and goodbye.”
The Boston Globe ran several stories about de la Torre and his regal lifestyle including yachts, airplanes, penthouses, and extensive travel on the company’s dime.
Torre was roundly criticized for going to Paris and the Olympics especially attending dressage events at the opulent Palace of Versailles while his company filed court papers to make the two hospitals’ closures official.
But what should concern everyone who sees a doctor, is that this week the Houston, Texas bankruptcy court approved the sale of Steward’s physicians network, Stewardship Health, to Rural HealthCare Group, an arm of buyout firm Kinderhook Industries, for $245 million. Kinderhook Industries is another private equity firm.
Buyout or private equity firms are known for acquiring a troubled company, stripping it of its assets, and then reselling the shell.
Today insurance companies set times, procedures, etc. so you will not be with your primary care doctor for more than 15 minutes.
Now with a private equity firm, the speedups will be on steroids as the company will retain the most profitable practices and jettison the others.
Good luck finding a primary care doctor, but there will be numerous high-priced specialists to treat you.
And this privatization of the healthcare industry will resemble privatizing education and the foundations are already in place.
Many states, including New Hampshire, allow boutique physician practices or concierge doctors in the name of free enterprise.
The patient pays a retainer to access a physician who sees fewer patients than a hospital affiliated doctor, and the patient receives more personalized care at a price that does not include the cost-shifting in the traditional health care system to those with insurance paying for those who do not have insurance through higher premiums.
If you have enough money, you can bypass the traditional system for better care, adding to the disparity between the brahmins and the rest of society.
Under this new system, the rich do not have to share their wealth to take care of those less fortunate. Does that sound familiar?
The Steward system rose from the Catholic hospitals’ mission to serve the less fortunate and private equity firms stripped its assets, while enriching its members while those needing medical services are at the mercy of a bankruptcy judge in Texas.
The health care system may need repair, but the Steward disaster is no solution.
Garry Rayno may be reached at garry.rayno@yahoo.com.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.
