Steward Health Care

Steward Health Care's 2024 bankruptcy demonstrated how private equity ownership of healthcare can prioritize extraction over patient care until hospitals become unviable. The company operated 31 hospitals across 8 states; at bankruptcy, many were running out of basic supplies, missing payroll, and losing staff. Private equity owner Cerberus Capital had sold hospital real estate and leased it back, extracting billions while creating rent obligations that consumed operating income. The mechanism failure was asset stripping in essential services. Steward's private equity owners sold real estate and equipment, then leased it back at rates that exceeded operational capacity to pay. The sale-leaseback transactions provided short-term returns to owners while creating long-term obligations that destroyed operations. This is parasitic extraction in healthcare—owners feeding on hospitals that communities depend on. Steward's collapse created healthcare crises in multiple communities. Hospitals that served as regional trauma centers and safety-net providers couldn't be easily replaced. State governments intervened to keep hospitals operating while seeking new operators. The bankruptcy demonstrated how private equity's short-term optimization model conflicts with healthcare's long-term infrastructure requirements.