The Hospital: Life, Death, and Dollars in a Small American Town

by Brian Alexander

Because the PE firms used borrowed money to finance these transactions, they needed to have a lot of cash spewing from the other end. They tried to maximize that cash by cutting costs and stripping assets. They sold off hospital real estate and kept those proceeds, then had the hospitals they controlled lease back the same real estate. After a few years, the firms would “exit” by selling the chain to some other party—if it hadn’t gone bankrupt first. Apollo Global Management paid $5.6 billion for LifePoint, a chain of hospitals whose outlets were located mainly in smaller southern towns. It then merged that chain with one it already owned, RCCH HealthCare Partners. The new company had hospitals in twenty-two states. The CEO of LifePoint walked away with nearly $70 million. In late 2019, Apollo had LifePoint sell ten hospitals to a real estate investment trust for $700 million and then lease them back.