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re: Apparently private equity is buying up small hospitals in LA

Posted on 3/18/24 at 11:40 am to
Posted by TROLA
BATON ROUGE
Member since Apr 2004
12579 posts
Posted on 3/18/24 at 11:40 am to
I do a lot of work for a set of companies that own a bunch of small rural hospitals in the south….when run correctly , they can be profitable and sustainable for the community but it takes a lot of capital to get them up to speed with modern medicine.. the successful models seem to revolve around operations, management and real estate in separate entities working together
Posted by CatfishJohn
Member since Jun 2020
14162 posts
Posted on 3/18/24 at 12:54 pm to
quote:

I do a lot of work for a set of companies that own a bunch of small rural hospitals in the south….when run correctly , they can be profitable and sustainable for the community but it takes a lot of capital to get them up to speed with modern medicine.. the successful models seem to revolve around operations, management and real estate in separate entities working together


The most successful ones are one of two things:

1. Non-profit and a sole community provider and they take advantage of all government breaks (e.g. 340B) and the rural area isn't rapidly contracting in population.

2. Owned by a large operator that can gain margin with scale (GPO, payer contracts, etc.)

Posted by LSUFanHouston
NOLA
Member since Jul 2009
37320 posts
Posted on 3/18/24 at 12:56 pm to
quote:

but it takes a lot of capital


Spending a bunch of money on long-lasting assets isn't really part of the operating plan for PE.
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