Public to Private: The Overwhelming Privatization of Hospitals Nationwide

Have you ever seen a hospital in financial distress suddenly change its name and transfer ownership to some other entity? This is, to put it simply, the concept of privatization in healthcare. All over the United States, hospitals are either labeled as “public” or “private,” meaning that they’re either government owned or owned by a private not-for-profit or for-profit company. 

Each and every day, more and more hospitals are becoming part of the private equity sector, where even 80% of physicians from the past year are employed by private systems/corporations; that being a 60% increase from 2019 [1]. From this, we have to consider two crucial questions: Is the level of care received better under privatization? And the other: Is hospital privatization a growing monopoly in the healthcare world?

Many say that hospital privatization provides care based on the ability to pay instead of medical need [2]. This leads to one of the biggest problems with privatization, as private, for-profit hospitals require higher payments for care. With the inability to pay, it’s practically impossible for some people to get the treatment and care they deserve. A disproportionate amount of U.S. privatized hospitals are located in rural areas that have a lower median household income and a lower patient experience score [3]. The lower patient experience score comes from the lack of income or refusal to accept government insurance (i.e., Medicare, Medicaid), which, in turn, leads to the inability of patients to pay for care.

The fact that the majority of privatized hospitals are located in rural, lower socioeconomic areas alone is cause for concern. These private-equity firms aren’t trying to maximize patient care, but to maximize return on their investment,hospital profit over an extended period of time. Today, some of the largest hospital chains are owned by private equity firms and not the U.S. government, those of which being Lifepoint Health and Ardent Health Services [4].  

These firms are completely monopolizing the hospital system across the U.S., but some people still argue that hospital privatization produces net positives in healthcare. More specifically, they say that privatized hospitals are more efficient than their public counterparts. On average, the length of stay decreased from 5.82 to 5.10 days after privatization for a sample of U.S. hospitals in a 2003 study [5]. These hospitals were able to become more efficient after privatization and care for their patients in a more efficient time frame, due to funds that privatized hospitals have that public hospitals lack. This increased funding helps with efficiency and provides up to date medical technology for patients, reducing their stay.

While privatized hospitals are able to care for patients more efficiently and in a smaller time frame, they still lack the ability to treat high severity cases like public hospitals can. In over 29 cities across the U.S., public hospitals are able to provide all levels of trauma care and also operate over 44% of burn care units nationwide [6]. That being said, public hospitals only make up 2% of overall hospitals in the country, so the fact that they provide the majority of these important health services is something worth highlighting. Without public hospitals, underrepresented patients, such as those who are uninsured or do not qualify for government programs like Medicaid, would be without care. With the growing frequency of private equity owned hospitals across the country, public hospitals are crucial in maintaining cost-effective care for underrepresented groups.

Considering all these factors, it’s still important to understand both sides in this argument. While privatized hospitals can be detrimental to underrepresented patients and prioritize financial growth over patient satisfaction and care, they don’t always fail in terms of providing sufficient healthcare. The fact that the average patient stay in a private hospital is less than that of a public hospital means that, for the most part, private hospitals are doing what’s necessary for their patients to be healthy again.

On the other hand, the idea that privatized hospitals aren’t a part of a monopoly, solely due to positive performance, is another misconception. These private hospitals exist in “mixed markets,” where they’re created to increase patient care/make themselves desirable, as a way to maximize their profit [7]. 

Overall, the privatized hospital system is a monopoly that’s like a two sided coin. By prioritizing monopoly profit, privatization offers efficiency that the public hospital system does not. However, the tradeoff for efficiency is filtering out undesirable consumer patients who frequent hospitals and need extensive care. The only way to deal with the U.S. hospital monopoly is to understand that it is something constantly growing and innovating, although it negatively impacts a government-funded system.

Reviewed by: Amber Sun

Designed by: Maya Rachlin

References: [1] Physicians Advocacy Institute. (2024). Updated Report: Hospital and Corporate Acquisition of Physician Practices and Physician Employment 2019-2023. Avalere Health. https://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/PAI-Research/PAI-Avalere%20Physician%20Employment%20Trends%20Study%202019-2023%20Final.pdf?ver=uGHF46u1GSeZgYXMKFyYvw%3d%3d

[2] Angell, M. (2008). Privatizing health care is not the answer: lessons from the United States. Canadian Medical Association Journal. 179(9), 916-919. https://www.cmaj.ca/content/179/9/916.short

[3] Bruch, J., Zeltzer, D., & Song, Z. (2021). Characteristics of Private Equity-Owned Hospitals in 2018. Annals of internal medicine, 174(2), 277–279. https://doi.org/10.7326/M20-1361.

[4] Private Equity Stakeholder Project. (2025). Private Equity Hospital Tracker. https://pestakeholder.org/private-equity-hospital-tracker/#_ftn5

[5] Villa, S., Kane, N. (2013). Assessing the Impact of Privatizing Public Hospitals in Three American States: Implications for Universal Health Coverage. Value in Health, 16(1), S24-S33.

https://www.sciencedirect.com/science/article/pii/S109830151204154X

[6] American Hospital Association. (2017). The Value of Membership - Public Hospitals. AHA. https://www.aha.org/2017-05-11-value-membership-public-hospitals

[7] Levaggi, L., Levaggi, R. (2023). Competition in the provision of hospital care: Are mixed markets a valid alternative? Economic Modelling, 127. https://www.sciencedirect.com/science/article/pii/S0264999323002845

Access Denied: The Ethical Fallout of America’s Medical Deserts

The United States of America is often viewed as the hub for groundbreaking medical innovations and economic prosperity; however, the reality behind healthcare access for many Americans in under-resourced communities is less than ideal. Across rural towns and low-income neighborhoods, hospitals are shutting down, and access to adequate healthcare is decreasing at a significant rate. These closures leave millions of Americans with little to no nearby access to trauma care, creating what public health researchers now call “medical deserts.”

According to the International Journal of Health Policy and Management, medical deserts are geographical areas where populations have limited access to qualified healthcare providers and quality healthcare services [1]. In these areas, the difference between life and death comes down to transport time. A stroke patient who once reached care in ten minutes might now face a forty-five-minute drive. For heart attacks, car crashes, or childbirth complications, that gap can be fatal. Since 2010, more than 150 rural hospitals in the U.S. have closed, and many more remain at risk [2]. The common thread among these hospital closures isn’t medical quality or an overall lack of practicing physicians—it’s money. Health centers serving low-income or underinsured patients operate on budgets so minute that one year of low reimbursements can put them in a deficit. When these hospitals close, the communities they serve don’t just lose access to emergency care, but also essential resources for chronic disease management and basic trust and reliance on the healthcare system as a whole.

Essentially, Americans facing socioeconomic barriers tend to experience these cumulative disadvantages when it comes to access inequity. This is primarily because rural and low-income areas tend to have the highest population of patients who are uninsured or on Medicaid [3]. Because rural hospitals tend to have lower occupancy rates and operate in states with limited Medicaid reimbursement, they generate far less revenue per patient. That financial reality is what drives many facilities into deficit and eventual closure– not a lack of community demand.

While distance remains a significant barrier in rural communities, proximity does not guarantee equitable healthcare. Even in urban settings where hospitals are geographically more easily accessible, low-income individuals face several obstacles that can make attaining care difficult. When Philadelphia’s Hahnemann University Hospital closed in 2019, patients from surrounding low-income neighborhoods had to take multiple bus transfers to reach the next ER. Even though the distance is under five miles to this hospital, the journey can often take hours [4]. So even in large cities with many hospitals, closure of a safety-net facility can systemically create a healthcare desert as the remaining options can be harder to reach, more crowded, or disconnected from the patient’s prior care network.

So how do these underfunded rural hospitals respond to these financial pressures? Although it varies by state, many hospitals are trying to balance financial sustainability and community necessities by narrowing the scope of specialty care these facilities access. For example, since Grantsburg, Wisconsin has an aging population, the low birth rates led to several local hospitals choosing to close their OB/GYN units. While the expensive upkeep of an obstetrics unit at the Grantsburg Hospital was deemed unjustified, this closure made it so that women had to travel nearly 40 minutes if they required pre- or post-natal care [3].

Furthermore, the American Hospital Association says that the “lack of health insurance coverage in rural areas results in high uncompensated care costs for hospitals,” showing that Medicaid and Medicare policies typically correlate with hospital sustainability [2]. 74% of recent hospital closures happened in states without Medicaid expansion policies, which clearly demonstrates how important Medicaid expansion is for financial viability in rural hospitals. However, recent policy proposals, such as the Big Beautiful Bill, project rural hospitals to lose up to $70 billion in federal Medicaid funding, pushing more of these facilities towards closure [5].

The growing number of medical deserts across the United States reveals a deeper moral issue in how the country allocates its healthcare resources. When a hospital’s ability to stay open depends more on insurance reimbursement rates than on community need, ethics and economic policies collide. These closures are not simply logistical inconveniences; they are serious ethical problems that determine who receives care in time to survive and who does not. The communities most affected are those already burdened by poverty, inadequate insurance coverage, and systemic neglect. Every closed hospital represents a silent moral failure as a nation, as well as an opportunity to reimagine and advocate for a system that prioritizes equity.

Reviewed by: Vedant Patel

Designed by: Vedant Patel

References:

[1] Flinterman, L. E., González-González, A. I., Seils, L., Bes, J., Ballester, M., Bañeres, J., Dan, S., Domagala, A., Dubas-Jakóbczyk, K., Likic, R., Kroezen, M., & Batenburg, R. (2023, December 1). Characteristics of medical deserts and approaches to mitigate their health workforce issues: A scoping review of empirical studies in western countries. International Journal of Health Policy and Management. https://www.ijhpm.com/article_4458.html 

[2] American Hospital Association. (2022, September). Rural Hospital Closures Threaten Access: Solutions to preserve care in local communities | AHA. https://www.aha.org/2022-09-07-rural-hospital-closures-threaten-access 

[3] Ramesh, T., & Gee, E. (2019, September). Rural hospital closures reduce access to emergency care - Center for American Progress. https://www.americanprogress.org/article/rural-hospital-closures-reduce-access-emergency-care/ 

[4] Brubaker, H. (2020, June 25). The loss of Hahnemann resonates a year later as covid-19 and black lives matter protests roil Philadelphia. WHYY. https://whyy.org/articles/the-loss-of-hahnemann-resonates-a-year-later-as-covid-19-and-black-lives-matter-protests-roil-philadelphia/ 

[5] Estimated Impact on Medicaid Enrollment and Hospital Expenditures in Rural Communities. National Rural Health Association. (2025, June 20). https://www.ruralhealth.us/getmedia/f79547dc-19b6-4f39-ac95-4f24ba0e0a84/OBBB-Impacts-On-Rural-Communities_06-20-25-final_v3-(002).pdf 

From Grants to Patients: The Financial Anatomy of Alzheimer’s Treatment

In contemporary medicine, discussions around care are rarely detached from those about money. Whether in policy debates or scientific publications, “funding” is a recurring word. Alzheimer’s disease (AD), the most common cause of dementia, provides a particularly stark lens through which to examine this relationship. Affecting over 7 million people in the U.S. in 2025 (Alzheimer's Association, 2025), AD imposes immense clinical and economic burdens. How do patients navigate between effective treatment and cost-efficiency? And how do the financial incentives behind treatments affect clinical decision-making?

Research into Alzheimer’s disease is a multi-billion-dollar industry, with governments and pharmaceutical companies investing billions to understand and mitigate the disease’s effects. Since the passage of the National Alzheimer’s Project Act (NAPA) in 2011, annual funding for Alzheimer’s research through the National Institutes of Health (NIH) is projected to reach $3.9 billion by 2026 (Alzheimer’s Association, 2025b). However, one of the five core goals of the 2012 National Plan, to “prevent and effectively treat Alzheimer’s disease and related dementias by 2025”, remains unmet. The failure rate of AD drug development was 99.6% from 2002 to 2012 (Drug Discovery Trends Editor, 2014), underscoring the deep disconnect between investment and clinical outcomes. 

According to Cummings et al. (2018), the total cost of an AD drug development is estimated at $5.6 billion and spans approximately 13 years from preclinical studies to FDA approval. Compared to cancer treatment development estimated at $793.6 million per agent, AD drug development is substantially more costly. This disparity highlights the challenges of translating funding into tangible therapeutic progress.

Three main pharmacological treatments are commonly used for Alzheimer’s: galantamine, memantine, and lecanemab. Each represents a different balance of clinical benefit, adverse reactions, and economic cost. 

Galantamine, marketed as Reminyl, is an acetylcholinesterase inhibitor prescribed for mild to moderate Alzheimer’s. It costs roughly $1,200 annually per patient (Suh et al., 2008). Studies show it can modestly improve cognition and delay functional decline (Onor et al., 2007), yet 46% of galantamine-treated patients reported gastrointestinal adverse effects (Jones et al., 2004). 

Memantine, on the other hand, targets glutamate activity in the brain and is used for moderate to severe Alzheimer’s. It is slightly more expensive at around $1,900 per year but offers only limited cognitive improvement (Tampi & Dyck, 2007). It shows the best profile of acceptability, but comes with serious risk if you do not take it as prescribed, as symptoms often worsen quickly (Blanco-Silvente et al., 2018).

Lecanemab, a monoclonal antibody targeting amyloid-beta plaques, is the most recent innovation and is deemed the most successful in slowing clinical decline from AD. In a Phase 3 trial, lecanemab slowed the rate of cognitive decline by 27% over 18 months among participants with early-stage AD. It also exhibited lower rates of adverse reactions, with 21.3% of patients who received lecanemab having an incidence of adverse events (Hodes, 2023). However, it has the most severe adverse reaction as it often results in amyloid-related imaging abnormalities, which may cause blood vessel leakiness leading to localised brain swelling and bleeding in the brain. Moreover, the treatment alone costs $26,500 per year (Grabowski & Rosenbloom, 2023). 

Despite such high drug prices, the cost for medication only accounts for 5% of the total cost of care for treated Alzheimer’s patients, with the overall economic burden of dementia in the U.S. reaching $781 billion, including quality of life loss and informal and medical care (Rika Kanaoka, 2025). Two-thirds of these costs are borne by patients and families, often through unpaid labor or selling property to pay for care. 

While drugs like galantamine or lecanemab aim to slow disease progression, they are not always effective and further expose socioeconomic inequalities embedded within the healthcare system. The pharmaceutical industry’s reliance on patent-based revenue models and high launch prices exacerbates the divide between scientific advancement and equitable access. The hidden economy of medicine ensures that financial pressures remain central to clinical outcomes. 

From the laboratory to the bedside, money moves silently through every stage of medicine. While drugs like galantamine, memantine, and lecanemab offer measurable, or at times modest, clinical benefits, their costs raise the question of how we can sustain innovation without commodifying care. The hidden economy of medicine is not inherently malevolent: grants fund lifesaving discoveries, and pharmaceutical profits support future research. Yet the structure of modern healthcare often hides the ethical trade-offs that accompany financial incentives. To navigate these tensions, healthcare must be more financially transparent, prioritize equitable access, and redefine value beyond profit and productivity.

Reviewed by: Anjali Reddy

Designed by: Poorvaja Chandramouli

References:

Alzheimer's Association. (2025a). Alzheimer’s Disease Facts and Figures. Alzheimer’s Disease and Dementia; Alzheimer’s Association. https://www.alz.org/alzheimers-dementia/facts-figures

Alzheimer's Association. (2025b, July 31). $100 Million Increase Approved for Alzheimer’s Research | alz.org. Alzheimer’s Association; Alzheimer’s Association. https://www.alz.org/news/2025/senate-appropriations-committee-approves-100-million-increase-alzheimers-research

Blanco-Silvente, L., Capellà, D., Garre-Olmo, J., Vilalta-Franch, J., & Castells, X. (2018). Predictors of discontinuation, efficacy, and Safety of Memantine Treatment for Alzheimer’s disease: meta-analysis and meta-regression of 18 Randomized Clinical Trials Involving 5004 Patients. BMC Geriatrics, 18(1). https://doi.org/10.1186/s12877-018-0857-5

Cummings, J., Reiber, C., & Kumar, P. (2018). The price of progress: Funding and financing Alzheimer’s disease drug development. Alzheimer’s & Dementia: Translational Research & Clinical Interventions, 4, 330–343. https://doi.org/10.1016/j.trci.2018.04.008

Drug Discovery Trends Editor. (2014, July 7). 99% of Alzheimer’s Drug Trials Fail, Study Says - Drug Discovery and Development. Drug Discovery and Development. https://www.drugdiscoverytrends.com/99-of-alzheimers-drug-trials-fail-study-says/

Grabowski, T. J., & Rosenbloom, M. (2023, July 7). What the FDA Approval of Lecanemab Means for Patients and Families: A Q&A with MBWC Clinicians - Memory and Brain Wellness Center. Depts.washington.edu. https://depts.washington.edu/mbwc/news/article/lecanemab

Hodes, R. J. (2023, July 6). NIA statement on report of lecanemab reducing cognitive decline in Alzheimer’s clinical trial. National Institute on Aging. https://www.nia.nih.gov/news/nia-statement-report-lecanemab-reducing-cognitive-decline-alzheimers-clinical-trial

Onor, M. L., Trevisiol, M., & Aguglia, E. (2007). Rivastigmine in the treatment of Alzheimer’s disease: an update. Clinical Interventions in Aging, 2(1), 17–32. https://doi.org/10.2147/ciia.2007.2.1.17

Rika Kanaoka. (2025, April 23). The Cost of Dementia in 2025 - April 23, 2025 - USC Schaeffer. USC Schaeffer. https://schaeffer.usc.edu/research/the-cost-of-dementia-in-2025/

Suh, G.-H., Jung, H. Y., Lee, C. U., & Choi, S. (2008). Economic and Clinical Benefits of Galantamine in the Treatment of Mild to Moderate Alzheimer’s Disease in a Korean Population: A 52-Week Prospective Study. Journal of Korean Medical Science, 23(1), 10–10. https://doi.org/10.3346/jkms.2008.23.1.10

Tampi, R. R., & Dyck, C. H. van. (2007). Memantine: efficacy and safety in mild-to-severe Alzheimer’s disease. Neuropsychiatric Disease and Treatment, 3(2), 245–258. https://doi.org/10.2147/nedt.2007.3.2.245