Private Equity-Owned Hospital in New Mexico Denying Patients Cancer Treatment
By Consumers for Quality Care, on June 26, 2024
A dozen cancer patients are accusing Memorial Medical Center in New Mexico, a for-profit, private equity-backed hospital, of denying them critical cancer care, according to an investigative report by NBC News.
Barbara Quarrell worked as a nurse at Memorial Medical Center for decades, when it was a nonprofit hospital owned by the city and the county. When she received a cancer diagnosis in 2022, she sought care at Memorial. Since Quarrell had stopped working at Memorial, the hospital had been purchased by Lifepoint Health, and began operating as a for-profit facility, backed by the private equity firm Apollo Global Management. Quarrell had health-insurance coverage through the Affordable Care Act (ACA) marketplace but was denied care by the hospital, forcing both her and her husband to quit their jobs and move hundreds of miles away to a facility that accepted her insurance.
NBC heard from eleven other cancer patients as well as seven current and former Memorial Medical employees about similar experiences with denied medical care at the facility.
Memorial may be in violation of the law, which states that the facility must provide care to “those unable to pay the full cost of healthcare services rendered to them.” For years, Memorial had a policy of accepting every indigent patient seeking health care into their facility, including for those in need of cancer treatments. Shortly after Apollo Global Management bought the facility, the policy changed, with Apollo saying that they “verbally” notified the city and county of this change in 2016.
Yolanda Diaz, the founder of CARE Las Cruces, a community nonprofit that receives funding from the city to provide consumers financial assistance for medical bills, has sounded the alarm on Memorial Medical since 2021. She stated, “When a hospital denies and delays needed health care services, it is harming residents it’s supposed to serve, creating imminent danger to life and safety.”
Records show that Memorial charges more for care compared to other for-profit hospitals in the country, which contributes to their above average profit margin of over 9 percent, or over $300 million in 2021. Meanwhile, the Centers for Medicare & Medicaid Services (CMS) hospital comparison site gives Memorial two stars out of five for overall quality. Memorial also rates poorly in providing charity care, which in 2021 amounted to just over one half of one percent of its expenses.
Nearly a quarter of all hospitals in New Mexico are owned by private equity firms. In recent years, private equity firms, backed by Wall Street investors, have contributed to this troubling trend. These firms are investing more and more in the health care industry, including by acquiring and merging existing health care systems. The result has been increased consolidation and decreased competition, which has led in turn to higher prices and reduced access to care. Thankfully, federal legislators are taking notice. The Senate Budget Committee recently launched a bipartisan investigation into private equity’s involvement in the country’s health care system.
Decreased competition hurts consumers, often leading to fewer options for care and higher out-of-pocket costs. CQC urges regulators and lawmakers to promote more competition and to discourage mergers and business practices that leave consumers worse off.
