How to Money · Wednesday, September 23, 2026
Dr. Jordan Grumet describes how private equity firms can negatively impact healthcare systems through a "corporate raider" strategy. This involves selling off a medical system's real estate and equipment, leasing them back, and then extracting maximum profits, often leading to the system's bankruptcy and abandonment by the firm once investors have recouped their money.
“So they buy a big medical system. They sell all the real estate. So the hospital sits on real estate. Nursing homes sit on real estate. Clinics sit on real estate. So they sell all the real estate, all the buildings, and then they rent them back.”
“The reason why they do this is they get a huge windfall of cash that way to pay back their investors. Right. So the minute venture capital private equity buy something, the first thing they want to do is recapture all their investors money.”
“Then they sell all the equipment and rent it back. Then they pretty much drive profits as hard as they can for the first bunch of months. And they literally bankrupt the system and then walk away and wash their hands from it.”