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KBIA’s Health & Wealth Desk covers the economy and health of rural and underserved communities in Missouri and beyond. The team produces a weekly radio segment, as well as in-depth features and regular blog posts. The reporting desk is funded by a grant from the University of Missouri, and the Missouri Foundation for Health.Contact the Health & Wealth desk.

Mid-Missouri hospital closures raise concerns about private equity in healthcare

The exterior of the Audrain Community Hospital in Mexico, Missouri.
Joe Martinez
Kaiser Health news
In late March, Noble Health announced it was suspending all services at two of its Missouri Hospitals­­ –– Audrain Community Hospital (above) and Callaway Community Hospital 30 miles away.

Ten rural hospitals in Missouri have closed in less than a decade, including two within the past year in mid-Missouri. Those two — Audrain Community Hospital and Callaway Community Hospital — were owned by a three-year-old startup called Noble Health. Noble was part of a private equity firm's portfolio, and it shuttered both institutions quickly after acquiring them. Kaiser Health News senior correspondent Sarah Jane Tribble investigated the closures and joined the Health & Wealth Desk to share what she found.


Health & Wealth: How did you find out about these hospital closures in particular?

Sarah Jane Tribble: These hospitals in particular came to my attention because my last project was on a hospital closure in rural southeastern Kansas. I got a call from someone in that community and [they] said, ‘Hey, there’s a group that wants to reopen the hospital that’s been closed for a couple of years, and they think they can make a go of it.’ After doing the reporting and having covered healthcare for decades now, I had a lot of questions I guess is the best way to put it. How do you reopen a closed rural hospital that closed because it didn’t have enough patient volume — enough patients staying the night there to stay open. And once I started asking those questions I discovered a whole lot of what I’ll call red flags that forced me to keep pursuing the path.

H&W: What did you find out about Noble Health: the company that acquired the hospitals?

Tribble: This company started in 2019, late 2019. It was a part of the portfolio of a company that called itself private equity at one time and then began to call itself venture capital, based out of Kansas City. The reason one of the directors who helped create the company, according to state filings, said they created Noble was to save a rural hospital. And specifically he was talking about, I believe, Callaway Community hospital in Fulton Missouri.

H&W: Can you talk about the impacts these acquisitions had on patient care?

Tribble: There were early signs starting in Fulton Missouri at Callaway Community hospital. I started to get reports from staff members that hey our security force that stands at the doors no longer works here anymore, they couldn’t pay the contract. So things started disappearing at the hospital. At Fulton, specifically, they closed the inpatient ward in January 2021 which is a little bit [of] odd timing considering when COVID hit rural Missouri. So some services were disappearing. Certainly things the staff thought they needed to operate were disappearing. And by the end they were traveling from hospital to hospital trying to get supplies because one hospital wouldn’t have them and another one would; they would borrow supplies from hospitals in Columbia, I’m told. And the staff would go without pay.

H&W: Is this a trend nationally, in terms of private equity getting into healthcare, and hospitals specifically?

Tribble: It is and this has been studied by some researchers out of North Carolina and other places. What they have found is, back in 2000, about $5 billion worth of investments in private equity were health care. Now, as recently as 2018, it increased twenty-fold to about $100 billion. And there’s a lot of concern around that, because private equity is a business model that’s a for-profit business model, which isn’t inherently bad, but they’re looking to make quick returns. They buy cheap and they make quick returns. These communities are desperate to save their hospitals. They’ll sell their hospitals cheap, and there could be some quick returns in a lot of kind of fancy financial ways I guess is the best way to put it. You buy the hospital and then you divide it into property and operations and you make the property pay the operations rent. And that was happening in Fulton, Missouri, according to documents that I found.

Sebastián Martínez Valdivia was a health reporter at KBIA and is documentary filmmaker who focuses on access to care in rural and immigrant communities. A native Spanish speaker and lifelong Missouri resident, Sebastián is interested in the often overlooked and under-covered world of immigrant life in the rural midwest. He has a bachelor's degree in broadcast journalism from the University of Missouri and a master's degree in documentary journalism at the same institution. Aside from public health, his other interests include conservation, climate change and ecology.