How far can the market heal?

A macabre dance is currently unfolding in American hospitals, one that deserves close attention well beyond the United States. Behind the spectacular bankruptcies of several private hospital groups lies a question that concerns all advanced democracies: to what extent can healthcare infrastructure be subjected to the logic of financial return without altering its fundamental mission? This question is, regrettably, no longer purely theoretical.

The Annals of Internal Medicine have published a landmark study conducted by researchers from Harvard, the University of Chicago, and the University of Pittsburgh. Analyzing more than one million emergency department visits by Medicare patients between 2009 and 2019, the authors compare 49 hospitals acquired by private equity funds with 293 comparable institutions that remained under traditional management.

The result is striking—precisely because of its sobriety: hospitals taken over by investment funds record seven additional deaths per 10,000 emergency visits, corresponding to a relative increase in mortality of approximately 13%. Seven deaths per ten thousand may seem negligible. Yet when such a gap is observed across more than one million medical records over a decade, it ceases to be a statistical fluctuation and becomes a signal of public health concern.

Moreover, the authors refrain from any excessive claim. They do not assert that they have reproduced laboratory experimental conditions. By focusing on emergency departments—where patients are not selected by hospitals—they significantly reduce the biases that have historically complicated the study of this phenomenon. Careful in its wording yet profound in its implications, their conclusion is nevertheless unambiguous: private equity ownership is associated with a measurable increase in mortality.

When the hospital becomes a financial asset

To understand this result, one must return to the very logic of private equity.

In its standard form, the acquisition of a company relies heavily on debt. Once the transaction is completed, the debt is borne by the acquired firm, which must now generate sufficient cash flows to service it while also remunerating investors.

While this model can generate efficiency gains in certain sectors, it becomes problematic when applied to an institution whose activity depends primarily on qualified personnel and the continuity of a vital public service.

The American study highlights an average 11.6% decline in full-time staffing and a reduction of more than 18% in wage expenditures in emergency departments. Behind these figures lie fewer staff, increased pressure on caregivers, longer waiting times, and a reduced capacity to absorb critical situations.

To this operational pressure is added another, less visible but equally decisive mechanism: sale-leaseback. Hospital buildings are sold to a real estate investor and immediately leased back to the facility. This transaction generates immediate liquidity and enables substantial dividend payouts. It also transforms a durable asset into a permanent financial burden: the hospital that once owned its premises becomes its tenant.

Financial imperatives thus cease to serve medical activity and instead become one of the constraints shaping it.

The lessons of Steward and Prospect

The bankruptcies of Steward Health Care and Prospect Medical Holdings stand as textbook cases.

Long presented as a model of private hospital management, Steward filed for bankruptcy protection in 2024. Prospect followed a few months later with more than two billion dollars in debt. Various U.S. congressional investigations subsequently revealed massive dividend distributions and real estate transactions that significantly weakened the groups involved—consequences that extended far beyond balance sheets.

In Delaware County, Pennsylvania, the closure of facilities linked to Prospect led to the disappearance of the region’s main trauma center as well as its only burn unit. More than three thousand healthcare workers lost their jobs, and an entire community found itself with reduced access to emergency care.

A hospital capacity that disappears—directly as a consequence of deteriorating financial accounts—means longer transport times, faster system saturation, and reduced safety margins across the entire healthcare system.

A question now relevant to France

It would be mistaken to consider these developments as uniquely American, for France is experiencing—or undergoing—a rapid consolidation of its private hospital sector. In 2020, Elsan was acquired by a consortium led by the American fund KKR. Two years later, the same actor attempted a large-scale acquisition of Ramsay Santé. In 2024, a Senate report with a telling title—Financialization of healthcare provision: a hostile takeover of health?—had already warned of the risks associated with this trend.

Admittedly, French safeguards remain stronger than those in the United States. The role of regional health agencies, control over licensing, and the structure of hospital financing limit certain excesses. However, they do not necessarily address the consequences of excessive leverage, aggressive dividend extraction, or gradual weakening of institutions through real estate transactions.

The American experience should therefore be understood—not as a prophecy—but as a warning.

The limits of the market

The question raised by these developments ultimately extends beyond the healthcare sector: it concerns how societies define the boundaries of the market itself.

No one disputes the usefulness of private capital, nor the need for significant investment to modernize medical infrastructure. The issue is not one of opposing investors and healthcare professionals, but rather of determining what limits must be set when the object of investment is not a retail chain or a logistics platform—but an institution upon which human life directly depends.

This is why transparency in debt structures, control over sale-leaseback operations, regulation of dividend distributions when quality indicators deteriorate, and strengthened powers for health authorities should be understood less as ideological choices than as precautions grounded in prudence.

These American researchers have not (only) demonstrated that every acquisition by an investment fund leads to disaster. What their work shows—more importantly—is that there exists a point at which the logic of financial return ceases to complement the mission of care and begins to directly compete with it.

When a hospital crosses that threshold, the cost is no longer measured solely in euros or dollars.