Rich Buyers Are Pushing Rural Hospitals to a Controversial Practice

Updated on June 7, 2018

CEDARVILLE, Calif.—Beau Gertz faced a crowd of worried locals at the town senior center, hoping to sell them on his vision for their long-beloved—but now bankrupt—hospital.

In worn blue jeans and an untucked shirt, the bearded entrepreneur from Denver pledged at a town-hall meeting in March to revive the Surprise Valley Community Hospital—a place many in the audience counted on to set their broken bones, stitch up cattle-tagging cuts, and tend to aging loved ones.

Gertz said that if they voted this week to let him buy their tiny public hospital, he would retain such vital services. Better still, he said, he’d like to open a “wellness center” to attract well-heeled outsiders—one that would offer telehealth, addiction treatment, physical therapy, genetic testing, intravenous vitamin infusions, and even massages. Cedarville’s failing hospital, now at least $4 million in debt, would not just bounce back but thrive, he said.

Gertz, 34, a former weightlifter who runs clinical-lab and nutraceutical companies, unveiled his plan to pay for it: He’d use the 26-bed hospital to bill insurers for lab tests regardless of where patients lived. Through telemedicine technology, doctors working for Surprise Valley could order tests for people who’d never set foot there.

To some of the 100 or so people at the meeting that night, Gertz’s plan offered hope. To others, it sounded suspiciously familiar: Just months before, another out-of-towner had proposed a similar