In the Hospital Sick Male Patient Sleeps on the Bed. Heart Rate Monitor Equipment is on His Finger.
Credit: iStock

Hospitals are among the most opaque institutions in American life. Few allow their doctors to talk to the press except in the hovering presence of “handlers.” Though they often employ cadres of “communications specialists” who pitch reporters with puff pieces, most are obsessed with keeping their finances and internal operations secret. 

The Hospital: Life, Death, and Dollars in a Small American Town
by Brian Alexander
St. Martin’s Press, 310 pp.

The first remarkable thing about Brian Alexander’s new book, The Hospital, is that he managed to pull off an exception to this seeming iron law of U.S. health care. He never explains exactly how, but in early 2018 he persuaded the CEO and board of a small, community hospital in rural Bryan, Ohio, to give him fly-on-the-wall access to their struggling institution—and complete freedom to write up what he witnessed. 

For the next year and a half, Alexander attended long rounds of anguished and divisive strategy sessions. Administrators and board members fought with consultants and each other over how to bring in enough revenue to avoid having to shut down or sell out to a big hospital chain. As Alexander became embedded in the hospital’s day-to-day operations, he gained the confidence of harried doctors and nurses, as well as patients and their loved ones. 

Alexander’s previous book, Glass House: The 1% Economy and the Shattering of the All-American Town, was about the economic decline of his hometown of Lancaster in central Ohio, so he had some advantages in penetrating Bryan’s tightly knit social networks. His career as a journeyman feature writer for publications like The Atlantic and Outside also left him practiced in capturing small but unforgettable details about the many different characters he met in Bryan. 

In one plot line, Alexander traces the tragic arc of a local man named Keith Swihart. When in his early 20s, Swihart faints while working on an assembly line at an auto parts factory. Diagnosed with type 2 diabetes, he often goes without the insulin his doctor prescribes because even with company-sponsored insurance he can’t afford it. Then, in the 10 years following the Great Recession, Swihart faces a series of layoffs and crappy jobs with ever-lower wages and ever-higher-deductible insurance. The grinding downward mobility leaves him and his family exposed to such high medical costs that they can’t afford even routine health screening. Swihart loses his wife to cervical cancer, which wasn’t caught until it was too late. Then, as a grieving widower and single dad, he winds up losing his eyesight and enduring an amputation in the hospital after complications from his poorly managed diabetes land him in the ER. 

But Alexander does not let the sad story end there; he also shows how the amputation affected the local pathologist, who was left to deal with Swihart’s discarded body parts. “Shannon Keil opened the cottage cheese tub containing Keith’s toes and part of his foot,” he writes. “Corruption had invaded the tissue, seeped into the bones, oozed its way up the metatarsals until they became pliable, decayed, and no longer able to support a man.” Alexander uses this image as a symbol for the entire U.S. health care system. “What a fucking failure,” he later quotes the pathologist as saying, explaining that she didn’t mean Swihart or the medical procedure, but the malevolent “forces” within our health care system and beyond “that had swept his toes into that small tub.” 

Alexander’s understanding of just what those forces are and how they operate beneath the surface of events is the second most remarkable thing about this book. While it takes talent and enterprise to go out into the hinterlands and bring back stories full of pain and pathos, plenty of literary journalists have done that. But Alexander also brings to his writing a deep understanding of the larger economic, political, and social trends that are slowly crushing the lives of the people he met in Bryan, and of people like them all over this country. In his telling, Bryan becomes a microcosm of American sickness in all its dimensions.

Alexander begins his story at the beginning. The land on which Bryan sits was once part of the Great Black Swamp, as it was referred to in pioneer days. The landscape was bleak and boggy and barely inhabited, but it was flat, which meant that it would become a favored route for early railroads as they pushed westward. Industry soon followed the rails, and by the 1920s Bryan had become a small but prospering manufacturing center looking to become a modern, progressive metropolis. Reaching that goal would require a modern, progressive hospital, and the town’s boosters soon came together to advocate for one. “Theirs was the vision of a hospital as public good and community asset,” Alexander writes. “There was little mention of money, except that the lack of it would be no barrier to treatment.” 

But like their counterparts in many other small communities across the country, Bryan’s boosters soon found the cost of their dream prohibitive. Alexander does a masterful job of explaining the underlying reasons why. 

As in so many other places, the gutting of Bryan, Ohio’s economy meant that, by default, its hospital became the largest local employer, as well as virtually the only remaining source of upper-middle-class jobs.

During this era, other countries, such as Germany, were crafting large social insurance programs. These systems spread the cost of health care across the whole population, thereby guaranteeing hospitals adequate revenue regardless of the income of their patients. But doctors in the United States, fearful of reductions to their autonomy and earning power, organized into a powerful lobby that opposed not only any kind of national health insurance program but even private plans that could make health care more affordable. In 1929, after two doctors in Los Angeles formed a practice that covered all health care costs for a fixed monthly subscription fee of $1.50, the wrath of other area medical professionals, on whom they depended for referrals, was so extreme that the Los Angeles Medical Association expelled the two doctors. Other physicians who experimented with similar payment plans were denied hospital privileges or were otherwise professionally shunned. 

Meanwhile, America’s dominant unions and large employers also opposed any role for government in providing health care to everyone. A spokesman for the National Association of Manufacturers said that “there is no greater reason for giving free medical service than free food.” Samuel Gompers, president of the American Federation of Labor, argued that if workers were just paid the wages they deserved they could afford to buy their own health care without relying on employers or the government. Both labor and capital joined with doctors in vilifying any effort to spread the cost of health care, using the enduring epithet “socialized medicine.”

In the absence of a national health care plan, the problem of how to provide care to people who couldn’t afford it had to be finessed. When Bryan finally got its own hospital in 1936, it was not a straightforward public institution like the town’s schools, library, or police department. Rather, like most hospitals in the country today, it was a weird, uniquely American hybrid: a nonprofit institution, incorporated as a charity, that provides some contingent care to the needy but effectively operates as a workshop for profit-seeking doctors and health care entrepreneurs. Bryan’s hospital would become an enormous source of local pride. But though it benefited from myriad forms of community support—from fund-raising drives to exemptions from local property taxes—it remained in essence a private corporation in the business of marketing medical services. 

As Bryan prospered, along with most middle-American towns and cities during the decades after World War II, this contradiction was problematic but workable. In the 1960s, millions of kids owned Etch A Sketches, which were all built in Bryan by the Ohio Art Company. Another local firm called ARO flourished by selling breathing masks for high-altitude pilots, and later for NASA astronauts. Mohawk Tools made industrial drill bits and other cutting devices used by carmakers and aircraft manufacturers. Good-paying factory jobs at these and other local firms typically came with generous employer- or union-sponsored health care plans that paid out whatever physicians and hospitals determined was a reasonable fee for their services. By charging newly flush doctors for office space, the hospital had little trouble maintaining its margins while still being able to treat charity cases. 

But by the end of the 1970s, the financing of independent, community-based hospitals like Bryan’s was becoming increasingly difficult, especially in the deindustrializing heartland. First, cheap imports hit the U.S. auto industry hard, including Bryan’s auto parts suppliers. Then, beginning in the Reagan era, financial deregulation and the federal government’s retreat from antitrust enforcement set off a frenzy of mergers, acquisitions, and leveraged buyouts that further decimated Bryan’s locally owned firms. ARO got bought out by Todd Shipyards, which raided the manufacturer’s pension funds and then sold the stripped-down firm to the corporate giant Ingersoll Rand, which in turn moved all of its remaining operations to North Carolina. A Canadian corporation acquired Etch A Sketch, reducing Ohio Art to a remnant of its former self. An Irish firm bought out Mohawk Tools.

“There was a time when on spring and summer Friday afternoons,” Alexander writes, “people in Bryan could stand outside, look toward the county airport, and watch the private planes streak overhead.” But, Alexander continues, as Bryan’s local firms failed or came under the control of distant corporations, “the planes stopped flying, the country clubs’ fairways grew over with weeds, and empty windows faced the town squares.”

As in so many other places, the gutting of Bryan’s economy meant that, by default, its hospital became the largest local employer, as well as virtually the only remaining source of upper-middle-class jobs. The town tried desperately to attract new businesses with tax giveaways and other subsidies. To persuade the midwestern home repair chain Menards to place a distribution center at the edge of town, Bryan built a new road. But even when public subsidies attracted new employers, the companies typically paid little more than the minimum wage and offered minimal health care benefits. The hospital’s CEO complained to Alexander that Menards was “a real problem for us” because three-quarters of Menards employees treated by the hospital were either on Medicaid, which pays hospitals low reimbursement rates, or lacked insurance altogether, which meant no reimbursement or lots of bad debt. 

Meanwhile, as more young and ambitious people left Bryan in search of better prospects, the remaining population served by the hospital grew older and sicker. This increased the demand for some profitable treatments, like heart surgery and chemotherapy, which helped the hospital’s margins. But the hospital could not find a way to expand the kind of medical services that Bryan’s downwardly mobile population most needed: services like helping patients to better manage their diabetes, overcome their alcohol and opioid addictions, or avoid falling victim to the growing epidemic of mental illness.

This remained true even after the expansion of Medicaid and private insurance under the Affordable Care Act. The ACA did bring more revenue to the hospital, but not enough to end the constant need to raise money. “We are seeing more bad debt than we were before [the passage of the Affordable Care Act and Medicaid expansion] from people who do have health insurance,” the hospital’s chief financial officer told Alexander. So the ACA wound up doing little to reorient the practice of medicine away from chasing dollars and toward providing the services most needed by the community. This is no doubt partly why Donald Trump’s attacks on the ACA and established politicians resonated deeply in Bryan. In Williams County, where Bryan is located, he took 69 percent of the vote in 2016. 

Alexander portrays everyone involved in trying to save Bryan’s hospital as largely motivated by a combination of local pride and idealistic dedication to the health care needs of their community. But given the perverse incentives under which the hospital was forced to operate, it became nearly impossible to reconcile its mission and its margins. Facing threats from bondholders as its reserves dwindled, the hospital was increasingly desperate to bring in more revenue. Yet all the most pressing medical needs identified by the local health department were ones that make little or no money. 

Facing threats from bondholders as its reserves dwindled, the hospital was desperate to bring in more revenue. Yet the most pressing medical needs identified by the local health department—primary care, pediatrics, mental health—were ones that make little or no money.

“Pediatrics, primary care, obesity, mental health, and dentistry all affected a lot more people,” Alexander writes, “but none of them were big moneymakers like a cath lab or radiation oncology were. They didn’t spin off lots of lab tests, either. Good dental care could prevent heart attacks, but treating heart attacks, and placing the stents used to prevent another one, made profits.” Following the advice of industry consultants, the hospital attempted to increase its “efficiency” by investing more in health care services that bring in the most money while neglecting those that create the most health. 

It gets worse. By the time Alexander arrived in Bryan in 2018, the hospital was also facing an increasingly mortal threat from two other failures of public policy. Deregulation of Wall Street and lax enforcement of antitrust laws had not only led to the loss of locally owned businesses; they had also made Bryan’s hospital vulnerable to takeover by giant health care conglomerates. 

As Alexander explains, two big hospital chains in the region, one expanding out of Toledo to the east and another expanding out of Fort Wayne, Indiana, to the west, had been gobbling up small hospitals like Bryan’s for more than a decade, “in a crazed rush to consolidate before they could be targeted themselves by even bigger predators.” And each time antitrust regulators failed to block another hospital merger, the power of the big over the small grew. 

Alexander provides a salient example of how this power imbalance compounds over time. When the hospital in Bryan needs to buy a stent for a patient’s clogged coronary artery, the best price it can get for the device is around $1,400. But bigger hospitals can obtain the same stent for as little as $750 because their market power gives them a stronger negotiating position with the manufacturers and distributors of stents and other medical supplies. 

The same raw power dynamics now set prices and allocate resources at every level of the health care sector. Drug companies, pharmacy chains, medical device makers, and insurance companies merge with each other to gain more leverage over hospitals and doctors’ practices. Hospitals and physicians in turn consolidate into still bigger, integrated health care oligopolies so they can push their consolidated suppliers around while also vanquishing their competitors. In the process, any hospital that remains small and independent becomes almost hopelessly vulnerable to the ones that have consolidated. Those of us who are mere consumers of health care bear the cost of consolidation in the form of rampant health care cost inflation, evaporating choice, and declining quality of service. 

When Alexander finished his reporting in Bryan just a few months into the COVID-19 crisis, conditions were deteriorating. Inflamed by Trump’s disinformation and a deepening distrust of government, much of the local population, along with large swaths of America, rejected mask wearing and flouted social distancing orders. Ohio’s chief public health official found gun-toting protestors on her lawn after a Republican state legislator called her “an unelected Globalist Health Director.” Meanwhile, Bryan’s hospital hemorrhaged money as it halted elective surgeries, lab tests, and imaging, and it more than doubled the number of hospital beds to accommodate COVID-19 patients. “Money bled out as if from a gushing wound,” Alexander writes. By August 2020, the hospital had lost $10 million, though reportedly it later recouped this loss with emergency government payments. 

Just as the coronavirus crisis was intensifying, a new CEO at the hospital decided it would be best for Alexander to leave, so that is where his fly-on-the-wall insights end. But the pandemic has likely increased the already huge financial pressure on Bryan’s hospital to close or sell out to a big corporate chain. Large, rich health care systems have the reserves to easily endure the financial strains brought on by the pandemic. But for small independent hospitals, like small independent businesses generally, surviving COVID-19 has become far less likely, so the monopolization of health care and the wider economy continues to accelerate. Upon completing this book, it occurred to me that it would be fitting to include it in a time capsule, so future generations might learn just how the promise of American life faded on our watch.

Phillip Longman

Phillip Longman is senior editor at the Washington Monthly and policy director at the Open Markets Institute.