Hospitals Close While Execs Made Millions; Prestigious Group Took Sackler Money

Welcome to the latest edition of Investigative Roundup, highlighting some of the best investigative reporting on healthcare each week.

Hospitals Close While Execs Make Millions

A months-long investigation into private equity involvement in healthcare by CBS News revealed a playbook in which hospitals in low-income neighborhoods are shuttered while executives make tens of millions of dollars.

The news outlet profiled closures at two facilities: Delaware County Memorial Hospital in Pennsylvania and Texas Vista Medical Center in San Antonio.

In November, the Pennsylvania hospital closed its emergency department for good, leaving residents to find alternate emergency care. In 2016, Los-Angeles based Prospect Medical Holdings purchased the hospital with help from private equity investors, and 2 years later took out a $1.12 billion loan.

From that loan, Prospect paid itself a $457 million dividend, and CEO Sam Lee received about $90 million, CBS News reported.

Prospect allegedly paid the loan back by selling the land and buildings of its hospitals to Birmingham, Alabama-based Medical Properties Trust, which subsequently leased the real estate back to Prospect.

Medical Properties Trust has a portfolio of real estate from some 200 hospitals, mostly in low-income communities, CBS News reported.

One of those properties is Texas Vista Medical Center in San Antonio, which will close its doors on May 1, leaving more than 800 employees without a job and roughly half a million people in the surrounding community with just one remaining full-service hospital totaling 110 beds, according to CBS News.

Steward Health Care purchased Texas Vista 6 years ago with the help of private equity investors, and at the same time, Medical Properties Trust purchased the land and the buildings on the hospital’s campus. Steward agreed to pay $5 million in rent annually to the Trust.

From 2017 to 2021, Medical Properties Trust CEO Edward Aldag earned around $70 million in salary, bonuses, and stock.

Steward said it was closing the hospital due to financial challenges related to the realities of serving a high-needs patient population that is frequently unable to pay for care — roughly 25% of patients don’t pay for healthcare services received at the hospital.

Yet community leaders argue the financial details around the purchase of the hospital and the lease agreement remain unclear, and that more transparency is needed in hospital financial transactions.

Thanks to a state law, Rhode Island Attorney General Peter Neronha has the power to open the books when there’s a financial transaction involving a hospital, which enabled him to discover the Prospect Medical Holdings transaction. He urged other state leaders to enact similar powers.

National Academies Took Sackler Money

The National Academies of Sciences, Engineering, and Medicine, a distinguished advisory group that helped shape the U.S. government’s response to the opioid crisis, has quietly accepted millions of dollars in donations from members of the Sackler family, according to the New York Times.

Since 2008, the National Academies have accepted roughly $19 million in donations from the family that owned Purdue Pharma, the maker of OxyContin, which has been criticized for playing an outsized role in the U.S. opioid epidemic.

Yet the institution has largely avoided scrutiny, even though it helped advise the government on opioids, notably through two influential reports related to national opioid policy.

One of those reports, released in 2011, claimed that roughly 100 million Americans were suffering from chronic pain, but has since been discredited.

Pain care researcher Michael Von Korff, ScD, told the Times he was not aware of the donations, but that “[i]t sounds like insanity to take money from principals of drug companies and then do reports related to opioids. I am really shocked.”

A National Academies spokeswoman told the Times in a statement that the Sackler donations “were never used to support any advisory activities on the use of opioids or on efforts to counter the opioid crisis.”

The spokeswoman also said the institution was prevented from returning the funds donated by the Sackler family due to legal restrictions and the donor’s refusal to accept the funds again.

The institution has not announced plans to conduct any reviews to determine whether the donations from the Sackler family may have influenced its policymaking. Outside experts have suggested it should consider dedicating those donated funds to efforts addressing the prevention and treatment of opioid addiction.

China’s COVID Censorship

While the Chinese government’s efforts to stifle scientists and censor discourse around the pandemic have been well documented, Beijing’s suppression of scientific research goes far deeper than even most researchers realize, according to the New York Times.

The Chinese government’s censorship campaign has affected international journals and scientific databases, and has prevented international investigations into the origins of the pandemic, according to the report.

In fact, pressure campaigns from Beijing have forced Chinese scientists to withhold data, withdraw critical research from public databases, and even edit or redact important information from journal submissions.

The censorship has also affected western scientific journals, as editors have frequently agreed to allow changes to be made or papers to be withdrawn, even without sufficient cause for retractions.

This far-reaching censorship campaign prevented doctors and policymakers from accessing important research about SARS-CoV-2 at critical junctures throughout the pandemic. It also led to an increase in mistrust in science and a surge in misinformation in western countries, the Times reported.

Chinese government censorship efforts became even more apparent after an international group of scientists uncovered previously withheld genetic sequence data collected from a Wuhan market by Chinese researchers in January 2020. Global health officials called the 3-year delay in releasing the data “inexcusable.”

The Chinese government has rejected such criticism, and has urged Chinese scientists to publish new research in domestic journals instead of international scientific journals, according to the report.