A hospital construction and investment bubble?
Paul Levy, who is no longer running a hospital, fears hospitals are in a private-equity investment bubble not unlike those fueled the likes of Enron and WorldCom.
I think he’s right. A couple of years ago I wrote the following:
Some of the boom in hospital employment over the last few years is quite frankly just another aspect of the debt boom that temporarily lifted the rest of the economy before painfully imploding. At this point nurses are merely facing the end of job growth, soon they’ll have to cope with outright job losses. It’s likely to get very ugly. An administrator recently explained to me his hospital’s revenue plan, which is more like a revenue hope. It’s going to get ugly in the health-care industry.
It’s quite possible that the hospital bubble has been further inflated over the past couple of years by the fiscal and monetary efforts to prop up the economy after the implosion of the housing bubble, just like the housing bubble was wildly inflated by policies aimed at staving off a recession after the end of the dotcom bubble and the 9/11 attacks.