The issue of financial firms buying health care assets to deconstruct them for cash is an important if complex issue. We all need to understand this....
[It] would be around this time that regulators would begin to understand that the corporate guarantees that might stand behind the private equity firm's acquisition of the hospital system are a nullity. The owners' resources are legally separated from those of the hospital system. It would take years of litigation to pierce that corporate veil. Thus, the commitments that have been made to the governmental and private constituents in the community are supported solely by the financial resources of the hospital system itself. But that hospital system faces high debt service costs and obligations, other long-term cost commitments, and increasingly difficult revenue restrictions.