This morning signified a sorrowful conclusion to my night shift. It was, or rather, had been, at a small community hospital situated in a quaint New England town, tucked away in the backyards of my birthplace. However, in just a few days, it will no longer function as a hospital and will transition into a stand-alone ER. Before I completed my final shift, I sat down with a seasoned doctor who had served there for roughly two decades and had been affiliated with the institution for nearly thirty. During his tenure serving the community, he was more than a physician; he was an integral part of the town’s existence. It felt like a poignant chat with Grandpa, as I affectionately referred to him, while we enjoyed tea and reflected on how hospital services had gradually diminished. Patients were now being redirected elsewhere, and despite his relentless efforts to keep the hospital operational, his advocacy had seemingly gone unheard. I drove away with one of my beloved Placebo songs resonating against the sound of rain on a brisk morning. Leaves adorned the roads in brilliant hues, shining with that unmistakable luster of New England autumn. I experienced a surreal moment and a sense of disbelief that gnawed at me during the drive to a local diner. How did it come to this? How could a local establishment with such rich history disappear so swiftly? The entire community now hangs by a precarious thread.

Desiring to delve deeper, I explored the ownership behind this faltering entity: Steward Health Care. Established in 2010, it was supported by the private equity firm, Cerberus Capital Management. That name resonated with me. As an enthusiast of Greek mythology, I couldn’t disregard the symbolism: Cerberus was the three-headed dog guarding the threshold between the living and the dead. With ironic foresight, this name became a self-fulfilling prophecy. Cerberus established Steward, which ultimately led eight of its hospitals into the metaphorical abyss. This decline reached its zenith in 2020 when Steward filed for bankruptcy, a collapse that profoundly affected health care access in various states, particularly Massachusetts. Two hospitals suffered severely, one of which had been operational for over 120 years and was even the site of the first abdominal surgery performed in the U.S. Both have permanently closed their doors.

The allure of this private equity endeavor was that it would be led by a physician, in particular a cardiothoracic surgeon, who was portrayed as a symbol of hope, someone capable of linking the realms of business and medicine. This was intended to be executed through a leveraged buyout (LBO), a type of acquisition that utilizes borrowed funds, often secured by the assets of the acquired company, to facilitate the purchase with a minimal amount of its own liquid assets. Essentially, Cerberus acquired hospitals using loans from banks, entailing high interest rates, with the hospitals serving as collateral, as they were perceived as reliable income sources. The interest on the debt, fully tax-deductible, conjured the illusion of financial brilliance. Or as Danny DeVito quipped in Other People’s Money: “It’s too late for prayers. We’re already dead. But we’re not broke yet.” For Cerberus, it was a high-yield tactic with minimal risk. For the hospitals? A slow deterioration. Unfortunately, the harsh truth for most business-minded individuals is that the majority of these establishments are in underserved or rural regions, where profitability was never the objective. Hospitals, especially those in rural areas, face enormous hurdles: low reimbursement rates, smaller patient volumes, and constrained financial leeway. There simply aren’t enough admissions or discharges to produce the revenue that urban hospitals generate, and there is heightened vulnerability to economic downturns, leaving fragile institutions operating on slim margins. When rural hospitals shut down, the repercussions are immediate and extensive: loss of healthcare access, deteriorating health outcomes, and an economic ripple effect that impacts local businesses and families. If you fall ill and no one is available to care for you, you’re more inclined to uproot your life and relocate to where you can potentially receive care.

This underscores the significance of the recent One Big Beautiful Bill, which includes a $50 billion Rural Health Transformation Program, even if it isn’t perfect. Critics rightly highlight that the bill provides scant direct protection for struggling hospitals. The funds aren’t allocated directly; instead, they’re distributed to states, with considerable discretion granted to the CMS Administrator. States may utilize the money to assist rural hospitals, but they aren’t mandated to do so. It could very well be spent on chronic disease prevention or technological enhancements, which, although beneficial, are not life-saving in the immediate term. Even more troubling are the permanent Medicaid cuts ingrained in the bill: long-term harm wrapped in a five-year relief package, akin to placing a Band-Aid on a gaping wound and hoping for the best outcome.