My favorite of these stories comes from a place up here in Northern Norway. A pretty desperate municipality gave away 150 acres of land (free, no strings attached) to a company which promised 3000 jobs, by building the worlds largest data center. Made some sense because the climate is naturally cold, and very low electricity prices back then.
A year or so later, the company was acquired by a crypto mining company for $10M USD - with the updated promise of maybe 10-15 jobs. Last year said crypto mining company offloaded the same land back to the municipality for $200k.
I can only assume that the founders/owners of the first company laughed all the way to the bank.
I bet they did laugh all the way to the bank, but the example shows how "well" local authorities manage to structure these deals. There are countless examples where a company offers something for otherwise grant gods forgotten place and they forget any due diligence or safeguards in contracts..
Promising 3000 jobs and only getting acquired for $10m makes me think it wasn’t that much of a win at all.
If they did any kind of due diligence, surely they’d have to know how much they’ve raised or what their revenue looks like, and $10m is very low for a firm that “should” create 3000 jobs
When we talk about "rural" anything, there can be some interesting nuances. What strikes me about my own rural area and our health care challenges...
1) There are a a lot of barriers to even basic care. If you can't get people in the door for basic care, you aren't going to be able to "upgrade" them to more profitable type of care.
2) There's a lot of emphasis on trying to bring more speciality care into the area - but like the article alludes - it's expensive to maintain modern equipment and pay specialist salaries. I have to wonder if a more hub-and-spoke model would be more profitable, IE: small "triage" clinics in small communities, more regional specialty centers to consolidate all that expensive equipment and personnel.
3) A lot of outsiders buying up care centers creates distrust. For example, VC has its hands thick into the specialized nursing facilities, squeezing out profit while reducing care. This is just plain gross and causes people to not want to put their loved ones into these facilities even when they really need the care. So VC drains them, closes their doors when they are no longer profitable - and poof, our communities lose.
4) In more urban areas, there are pay-for-service / private pay exclusive clinics that have popped up. Someone who could bring this model to rural America - realizing that there are people here who can and would pay for it - would do well.
I would guess the model has them loose money but pay themselves fees then when they are too low they ask for a bailout. I can’t imagine it’s possible to make money in Medicare patients and Medicaid pays less than a doctors salary.
A company buying up all the dying rural hospitals is like the companies who have bought up all the dying rural newspapers. Except more assets to strip.
If you read the article the person who is buying them is "An emergency room doctor and addiction specialist" who is trying to keep the rural hospitals open and functional, in order to help people and communities.
I don't doubt what you say maybe happening, though I imagine that would be a lot of larger rural center hospitals.
It still baffles me that only ~20% of your hospitals are government owned, and equally as many for-profit.
Buying a rural hospital is like buying a money pit, if the money pit had another money pit inside it that was constantly generating new money pits. Judging from this guy's state filings, he's pretty much getting the right to lease an empty building for $100/year, as long as he refurbishes it and runs it as a 49-bed hospital; their pro formas are, I think, somewhat optimistic, and I'm worried about the number of physicians per beds they imply, but if they're very, very good and their pro formas hold they could get back in the black in about six years. There are definitely better ways to make money than this out there.
The owner would need to have multiple income sources and ba a jack of all trades a la "Mr. Haney" of "Green Acres" TV Show where they own the hospital, but also run several businesses... antique store, an airplane service, an animal rental, a taxi service, a home renovation service, an unemployment agency, several delivery services, and a chicken watching service, just to name a few.
so.... if i have a 100 bucks i can be a hospital owner? maybe raise awareness about the whole situation and get more people on board or have to give up the property and loose your entire investment ($100)
A year or so later, the company was acquired by a crypto mining company for $10M USD - with the updated promise of maybe 10-15 jobs. Last year said crypto mining company offloaded the same land back to the municipality for $200k.
I can only assume that the founders/owners of the first company laughed all the way to the bank.