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‘A Place to Die’: Inside a Nightmare For-Profit Hospital in Rural America

Hospitals across rural America are placing profit before people, and lives are lost as a result. Places like Wilson, NC are experiencing the worst of it.

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Reported by Moe Tkacik, produced and edited by Ian McKenna

A North Carolina hospital owned by private equity giant Apollo is descending into extreme chaos. People are dying and ER doctors say it’s the worst they’ve ever seen. We went inside with Moe Tkacik of American Economic Liberties Project to investigate the meltdown of for-profit health care in rural America. Below is a full transcript of the video.

Madison Etheridge: Wilson is a small town. At one point in time it was the world’s biggest tobacco supplier and things like that. Everybody knows everybody there. I like that aspect of it, but there’s certain things in Wilson that they can get better at. And one of those things is the hospital. 

This picture is, I think, is my first Christmas. And you can definitely see how happy he is and, you know, him as a person. In 2020, he went into the hospital just for a few regular things, just going in, and then never came out, basically.

My father fell in the ICU and he fell because his arms weren’t restrained, the bed alarm wasn’t on, so he pulled the tube out of his throat, stood up, yelled, fell. That’s where the nurse found him after however many minutes in a pool of blood when he fell.

Moe Tkacik: Wilson Medical Center is the only hospital serving Wilson County, North Carolina. After being bought by a private equity behemoth, doctors, nurses, and patients have told me the hospital is putting profit over care to an extreme degree.

It’s nothing more than a place to die now, several Wilsonians have told me, and a clear and sobering view of the dismal state of rural health care in America.

Dr. Mitchell Li: This is an extraction operation. It’s a billionaire factory. And they’re doing that by essentially mining the wealth of poor rural communities. 

Madison: So many people I know will not go to Wilson Hospital if they can help it.

William Farris: If you’re profit-driven and you’re not concerned about patient care, the recipe is exactly what we have in Wilson, and it’s a disaster.

Moe: Doctors I’ve spoken with say chronic understaffing has diminished this once respectable hospital into a glorified for-profit urgent care, where profoundly sick patients lie in hallway beds, waiting to be airlifted away to some nonprofit institution that can actually treat them.

[Doctor 1 Testimony]: I’ve been an ER doctor for two decades in more hospitals than you can comprehend, and Wilson is the worst.

[Doctor 2 Testimony]: Corners are being cut and in my opinion patient safety is being compromised.

[Doctor 3 Testimony]: I guess when they were working out the sale to Apollo, it really started to feel like a communist takeover. Meaning that suddenly we had nothing, we weren’t going to get anything. 

[Doctor 2 Testimony]: The staffing of the hospital seems to be inadequate for the needs of the community.

[Doctor 3 Testimony]: Every single day, I dreaded going to work.

Moe: Private equity firms are interested in extracting the most cash in the shortest time frame possible from the companies they buy out, not investing in patient care or anything else. Or better put, “the private equity business model is fundamentally incompatible with sound health care that serves patients.” And that incompatibility inevitably turns deadly.

Madison: I come here all the time. On my 21st birthday. I came and I took a Fireball shot with him. And it stayed here ever since March 12th, even through all the storms and everything. I don’t know how, but it stayed here.

Whenever it showed on his death certificate that it was blunt force trauma to the head, that’s when I really realized, you know, it wasn’t because of him, it was because of neglect. It was because people weren’t doing what they were supposed to do. There was supposed to be a bedsitter or if not a bedsitter, a nurse was always supposed to be at her station. None of that happened. 

Whenever I found that out, I was just I was shocked and I was honestly, I was kind of mad. I was angry. I was angry knowing that that wasn’t there in the room for my dad.

Moe: Wilson Medical Center recently made headlines after federal regulators threatened to pull their Medicare funding, an extremely rare move. In a 45-page report, The Centers for Medicare

 and Medicaid Services outlined the immediate jeopardy at the hospital linked to two patient deaths. The circumstances of one of those deaths was remarkably similar to what happened to Madison’s father.

William: You know, there’s all kinds of instances where I think that the patient is not first on the list. And that’s what my concern is. And that’s why I said something to the county commissioners. 

Moe: William Farris is an attorney in Wilson. He spoke up about the report at a July 11th County Board of Commissioners meeting when it didn’t make the agenda.

[William at County Board of Commissioners meeting]: We’re in immediate jeopardy

 for losing Medicare funding. That’s less than 3% of the hospitals—less than 3% of the hospitals that are surveyed have that problem.

William: So let me just be real clear: The doctors and nurses, they’re not responsible for anything that’s happening. My problem is with the management of the hospital all the way up to Apollo.

Moe: Apollo Global Management, one of the biggest private equity firms in the world, bought around 70 LifePoint hospitals, including the one in Wilson, in 2018 for $5.6 billion. The deal was part of a much bigger trend. Private equity firms plowed $750 billion into American health care institutions between 2010 and 2020.

Olivia Smith: That easy profit is what drives private equity to invest in health care. It creates this appealing landscape because it’s somewhat of a wild, wild west.

Moe: Olivia Smith is an attorney with Wallace and Graham. Her experience in suing private equity owned health care facilities has made her very familiar with the private equity playbook. 

Olivia: What they often do is form a corporation or an LLC or any kind of corporate form, and the legal owner will be the corporate form, not the true owners. So they have insulated themselves from any connection between the operations and the health care and themselves.

Often we see the actual property that the health facility is on put into a separate LLC and—owned by the same owners, of course—however, they then lease themselves that building. There’s also various ways that they can further vertically integrate through pharmacies, through staffing companies, through housekeeping and hospitality companies.

All of these can be owned by the same individuals theoretically but placed into separate corporate forms and transact in business with one another. And so really it’s just kind of musical chairs of moving money around from one pocket to another.

Moe: We asked Olivia to look at the ownership chart for Wilson Medical Center to help us better understand how the private equity model has affected the hospital. 

Olivia: In an ideal world, only the bottom entity would exist. And I say that because that’s the medical provider, that is the health care provider. In reality, it’s this top entity that’s making those decisions by virtue of setting budgets and providing set amounts of money that the bottom entity can actually spend on patient care. And so that distance, what it does is it entails severe budget cuts.

Moe: Apollo financed much of the transaction to buy LifePoint with so-called sub-investment

grade debt—junk bonds—which came with punishing interest payments, driving the hospital

chain’s annual interest expenses from about $150 million in 2017 to $578 million in 2019.

The deal has already paid dividends to Apollo investors, who booked a $1.6 billion profit last year when the private equity firm sold LifePoint from one of its funds—Fund VIII—to another—Fund IX. But the money to pay off the junk bond holders that made it all possible has to come from somewhere. And it usually comes from the budgets designed to keep a hospital running.

Dr. Lee: This situation happening here is extreme, but it’s happening throughout the country.

Moe: Dr. Mitchell Lee is an ER doctor in North Carolina. He also founded the group Take Medicine Back, aimed at exposing the practices of private equity in medicine.

Dr. Lee: These private equity firms have realized they can do the billing without doing the rest of it. There’s no innovation as far as good patient care. There’s innovation in how to extract wealth. And what that translates to is decreased staffing, do more with less, and predatory billing.  In a health care system that’s already nontransparent, this just takes it to the next level, accelerates things.

Moe: And that acceleration, unfortunately, can lead to hospital closures, devastating rural communities.

Dr. Lee: When health care fails, private equity firms don’t take a hit. They made money either way. Heads I win, tails you lose. 

Moe: You can see the cycle of extraction, deterioration, and failure on display in Wilson. 

William: Wilson is a growing community and instead of the hospital growing, it is shrinking. The biggest thing in the hospital, it seems, is the ER and that’s not the way it should be. 

Moe: Every time I visited the hospital, the E.R. was packed. The rest of the hospital,  however, was eerily empty.Doctors told me the hospital, which is licensed for 294 beds, was caring for just around 50 patients.

William: That in and of itself is sort of the deterioration. Now, does it happen at other hospitals? Absolutely. But in Wilson, the reason is because they brought those numbers down. And the reason that is, is because they found their happy medium. They found their corporate money. 

Moe: This is the private equity modal, and the community suffers.

Dr. Lee: Here, it’s the majority of beds are being unstaffed. At this point, it’s to an extreme where you may as well have a freestanding emergency department with an empty building. And all of those sick patients—the sick patients don’t go away. They are left in the emergency department in what amounts to triage in a war zone every single day.

[William at County Board of Commissioners meeting]: You have people sitting in rooms in the ER for one, two, and three days instead of going up to rooms. That’s despicable. 

Moe: Holding private equity accountable for poor patient care and legitimate negligence is difficult, especially in North Carolina, where an immunity shield for health care providers is still under effect. 

Olivia: It was designed to operate as a shield, a shield when it was deserved. Instead, health care providers have used it as a sword.

Moe: Senate Bill 704 was supposedly aimed at limiting legal actions against health care providers around COVID-19 deaths.

Olivia: Effectively, it includes any conduct and the definition of health care providers is so broad that it includes board members, owners of private equity groups that own health care providers, administrators, and they have avoided liability in places where it’s very difficult to find a connection to COVID at all.

Moe: That means families like Madison’s might never have their day in court.

Madison: So that’s the last picture I have of him. Me and my brother are going through it right now. We can’t do anything to do what’s right for our father because of this.

Moe: The immunity shield, as written into the law, expires once the governor’s emergency declaration on COVID is lifted, currently set for August 15. 

As for the unsafe conditions threatening the hospital’s Medicare funding, CMS inspectors determined during a follow-up that Wilson no longer posed an “immediate jeopardy” to patients. But they found so many more violations that the agency postponed its decision on Wilson’s Medicare termination to September 22.

William: When Apollo comes in, it’s profit over patient care. And that’s when you’re pushing

the limits of ethics. That’s when you’re pushing the limits of morals. And that’s when you’re not thinking about Wilson, North Carolina. You’re thinking about the dollar. 

Moe: If Wilson doesn’t find a solution, the community could soon be the latest victim in a dangerous trend. At least 140 rural hospitals have closed since 2010. Experts say hundreds more are on the verge of closing due to financial distress. But that distress is not purely a natural occurrence.

A 2018 GAO study found that for-profit hospitals like the one in Wilson, accounted for just 11% of rural hospitals in 2013, but 36% of rural hospital closures through 2017. Farris and many Wilson community leaders believe they may have legal standing to evict private equity from their hospital.

That’s because something called a reverter clause in state law governing the sale of public hospitals to for-profit entities requires Apollo to provide same or like services to what the hospital offered prior to the sale. That clearly hasn’t happened. 

[William at County Board of Commissioners meeting]: This has got to change and we’ve got to look at the reverter clause. 

William: And we can’t afford we cannot afford to let it go on. Either they’ve got to change the way they do business, or they don’t need to be in Wilson.

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