In this episode of Business Explains the World, Nich visits an abandoned hospital to understand how it went from a pillar of the community to shuttered, while executives at Steward Health Care, one of the largest private, for-profit hospital chains in the U.S., made millions. From private equity buyouts to sale-leaseback real estate deals, we use Steward as a case study to explain a broader shift in American healthcare: how hospitals became financial assets, how money flows through modern hospital systems, and how investors can get paid even when the care itself is disappearing.
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A note on sourcing and requests for comment
We based a lot of this story on reporting from the Boston Globe and Business Insider, some of which you can find here:
We reached out to and briefed all the parties named in this story on the details we reported, and gave them more than a week to respond with comments. Steward Healthcare filed for Chapter 11 bankruptcy in May 2024. Cerberus and Ralph De La Torre did not respond. Medical doj fallout james comey prosecution Properties Trust, Inc. (MPT) disputes that its business model harms hospitals. When we asked for comment, the company directed us to these statements:
Additional credits for USA TODAY NETWORK via Imagn Images from The Tennessean:
© Jack Corn, © Dale Ernsberger, © Ricky Rogers, © P. Casey Daley
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0:00 Tracking a $40M yacht
1:26 How did people get rich while hospitals failed?
1:55 When hospitals weren’t businesses (and how that changed)
3:09 How KFC inspired turning hospitals into businesses
5:12 A hospital’s profit map: which departments make money
6:31 What a profit-driven owner cuts (and what law won’t let them cut)
9:59 tastytrade ad
10:52 Visiting an abandoned hospital: Nashoba Valley Medical Center
11:20 Meet Bethany McLean — and the Steward story
12:37 The key move: sale-leasebacks (selling the land under hospitals)
14:29 What collapse looked like on the ground (supplies, staffing, transfers)
17:11 Why “ban criminal defense lawyer private equity” isn’t the solution
19:45 The other force: the landlord incentive loop
21:53 The final scene: a hospital left behind
