MEXICO, Mo. — When the new corporate owners of two rural hospitals suddenly announced they would stop admitting patients one Friday in March, Kayla Schudel, a nurse, stood resolute in the nearly empty lobby of Audrain Community Hospital: “You’ll be seen; the ER is open.”
The hospital — with 40 beds and five clinics — typically saw 24 to 50 emergency room cases a day, treating patients from the surrounding 1,000-plus acre farms and tiny no-stoplight towns, she said. She wouldn’t abandon them.
A week later Noble Health had the final word: It locked the doors.
Noble, a three-year-old startup that acquired Audrain and nearby Callaway Community Hospital, offered explanations on social media, including “a technology issue” and a need to “restructure their operations” to keep the hospitals financially viable.
The company should have had plentiful resources to keep them afloat: Noble was launched in late 2019 by Nueterra Capital, a venture capital and private equity firm that has raised millions of dollars to back dozens of health care companies, according to Nueterra’s portfolio and federal filings.
What’s more, in addition to Medicare and Medicaid funds, Noble had received nearly $20 million in federal covid relief money in the 18 months before it closed the hospitals — funds whose use is still not fully accounted for.
Private equity investors, with their focus on buying cheap and reaping quick returns, are moving voraciously into the U.S. health care system; investments increased twentyfold from 2000 to 2018, and have only accelerated since. Financially distressed rural hospitals like Audrain are targets, putting vulnerable communities at the mercy of firms whose North Star is profit, rather than patient health. A recent report found that 441, more than 20%, were at risk of closing or losing services.
The saga that followed Noble into these towns may well serve as a warning flare from the rolling wheat and corn fields between Kansas City and St. Louis.
Noble acquired the hospitals after charming local leaders desperate to save beloved local institutions. And federal regulators did nothing to block or thoroughly vet the acquisition, despite red flags.