“Every struggling hospital’s story is painful in its own way, but Riverton’s woes are a snapshot of the turmoil that has engulfed the hospital sector in the almost three decades since private-equity funds—which use debt to buy companies with the ostensible goal of improving them—decided that the hospital business would make a good investment. By 2011, seven of the largest for-profit chains were owned by PE firms, according to the researchers Eileen Appelbaum and Rosemary Batt, who have written a number of articles and reports about private equity’s influence on health care. …many other hospital companies have struggled to operate with the debt they took on under private-equity firms’ control. As Batt and Appelbaum wrote in 2020, “The hospital chains faced major challenges in meeting loan obligations accumulated through LBOs of add-on acquisitions; and local health markets experienced instability caused by the pressure of high levels of debt in these national hospital systems and by the imperative to earn high returns for investors.”
—Joe Nocera and Bethany McLean in “What Financial Engineering Does to Hospitals”
