Sold for Parts: How America's Essential Services Became a Wall Street Portfolio

The Quiet Takeover

While Americans were navigating pandemic lockdowns, inflation spikes, and return-to-office debates between 2021 and 2024, a less visible transformation was reshaping the country's economic foundation. Your family doctor's practice, your childhood home, the nursing facility caring for your aging parent, even your dentist's office—all were increasingly likely to answer not to local owners or community stakeholders, but to distant financial firms with names like Blackstone, KKR, and Fortress Investment Group.

The numbers tell a story that contradicts the narrative of economic recovery. While GDP grew and unemployment fell, essential services that Americans depend on daily were being systematically acquired, consolidated, and optimized for a singular purpose: extracting maximum returns for investors within a five-to-seven-year window. It's a process that turns communities into commodities and transforms the places where Americans live, heal, and age into line items on a private equity balance sheet.

This wasn't a conspiracy. It was simply capitalism operating without guardrails, and it accelerated dramatically in the post-pandemic years. The question facing Americans now is whether the pieces of their communities can be reassembled—or if they've been sold off for good.

Your Doctor Answers to Wall Street Now

Rebecca Harris thought she'd found stability when she rented a house in Huntersville, North Carolina, in 2020. It represented a fresh start after leaving a difficult marriage. Then the ceiling started caving in. Her landlord, FirstKey Homes, was one of the new breed of corporate landlords that had emerged after the 2008 financial crisis. But Harris's housing troubles were just one symptom of a much broader transformation.

In 2024 alone, private equity firms executed 1,049 healthcare deals in the United States—166 leveraged buyouts, 262 growth investments, and 621 add-on acquisitions. These weren't just financial transactions. Each deal represented doctors' offices, hospitals, nursing homes, and clinics changing hands, often without patients knowing their care was now directed by investors hundreds or thousands of miles away.

The dental industry offers a stark example. Private equity's share of dental practices nearly doubled between 2015 and 2021, jumping from 6.6% to 12.8%. By 2024, dental care saw 137 add-on acquisitions alone, with seven of the thirteen most active private equity-backed platforms operating in dentistry. The appeal is obvious: predictable cash flow, opportunities for consolidation, and patients who need regular care regardless of economic conditions.

But the model raises troubling questions. A 2021 investigation documented extensive issues at private equity-owned dental chains, including allegations that some companies used salespeople—euphemistically called "patient education consultants"—to pitch expensive procedures like dental implants before patients had even seen a dentist. ClearChoice, owned by Ares Management, American Securities, and Leonard Green & Partners, faced lawsuits over exactly these practices.

Cardiology followed a similar trajectory. In the past decade, private equity firms acquired 342 cardiology clinics, with a stunning 94% of those deals occurring between 2021 and 2023. In seven states, private equity-acquired practices now account for more than 10% of all cardiology care. Rhode Island leads at 37.1%, followed by Nevada at 26.4%. Heart disease, after all, is the leading cause of death in America and costs more than $200 billion annually in healthcare and lost productivity—a market too lucrative to ignore.

Behavioral health saw perhaps the most dramatic consolidation. Between 2010 and 2021, private equity buyouts accounted for roughly 60% of all behavioral health acquisition activity. The deals weren't random; 25% of acquired facilities were located within 20 miles of one another, and 50% within 80 miles—a deliberate strategy to build regional monopolies below the radar of federal antitrust enforcement.

The elderly weren't spared. By 2024, the eight largest senior living operators owned by private equity controlled 968 properties comprising 152,392 units. When Fortress Investment Group acquired The Village at Gainesville—one of America's largest retirement rental communities with 639 residences—residents found information packets about the private equity firm confiscated from their mail cubbies. The management didn't want them knowing who their new landlord really was.

The financial engineering behind these deals is where the model's flaws become apparent. Private equity firms typically use leveraged buyouts, borrowing heavily against the target company's own assets to finance the purchase. The acquired healthcare facility is then left carrying the debt used to buy it. Research shows that facilities acquired through leveraged buyouts are nearly ten times more likely to go bankrupt than those that aren't.

The human cost is real. Consider Crozer Health, a four-hospital system near Philadelphia owned by Prospect Medical Holdings, which was backed by private equity firm Leonard Green & Partners from 2010 to 2021. Even as Crozer declined—failing to pay vendors, shuttering services, with nurses describing crumbling stucco, broken air conditioning, and horrendous supply quality—Leonard Green and minority investors extracted $650 million in dividends and fees before selling in 2021. "Everybody just wants Prospect to leave and give us a chance to rebuild," said Peggy Malone, a behavioral health nurse who has worked at Crozer-Chester Medical Center for 36 years.

The pattern repeated across the country. In 2024, seven of the eight largest healthcare bankruptcies involved private equity-backed companies. The business model—extract maximum value in minimum time—proved fundamentally incompatible with providing sustainable healthcare.

Wall Street Becomes Your Landlord

The transformation of American housing followed a similar script, but it began earlier and moved faster. When the 2008 financial crisis left millions of foreclosed homes scattered across the country, institutional investors saw opportunity. In late 2011, no single investor owned more than 1,000 single-family homes. By 2015, institutional investors collectively held between 170,000 and 300,000 homes. By 2022, that number had grown to 450,000 homes owned by just 32 institutional investors, with the top five controlling nearly 300,000 properties.

Companies like Invitation Homes, American Homes 4 Rent, and Tricon Residential (acquired by Blackstone in 2024) became household names in the industry, if not in the households themselves. Their strategy was surgical: concentrate purchases in high-growth Sunbelt markets where operational efficiencies could be maximized. In Atlanta, institutional investors came to own 25% of the single-family rental market. In Jacksonville, it was 21%. In Charlotte, 18%.

The government itself facilitated this transformation. Fannie Mae's REO-to-Rental Initiative pilot program, launched in 2012, allowed pre-qualified investors to bid on large portfolios of foreclosed properties, ostensibly to stabilize the housing market. Roughly 2,500 properties were sold through the program. By 2017, Fannie Mae had backed a $1 billion loan to Invitation Homes, while Freddie Mac provided $1.3 billion in loans to single-family home institutional investors. The programs were terminated in 2018, but the damage was done—Wall Street had established its beachhead in America's neighborhoods.

The impact on communities, particularly communities of color, was devastating. Research in Atlanta found that institutional investors robbed potential homeowners of $4 billion in equity between 2007 and 2016, with the impact felt predominantly in Black neighborhoods. When investors buy homes with cash offers that individual buyers can't match, they don't just acquire property—they foreclose futures.

For tenants, corporate landlords brought a different set of problems. Research consistently shows that institutional investors file for evictions at higher rates than small landlords. They employ fee stacking—piling on charges for everything from online payment processing to "smart home technology fees." Maintenance requests disappear into centralized call centers where accountability is diffuse and response times stretch. When your landlord is a limited liability company owned by a real estate investment trust managed by a private equity firm, who exactly do you call when the ceiling caves in?

The industry's latest innovation makes the model's priorities crystal clear: build-for-rent communities. American Homes 4 Rent pioneered developments specifically designed for operational efficiency rather than resident satisfaction. As researchers noted, these communities can be maintained at just 25% of normal costs because "every aspect of the home has been optimized to reduce maintenance expenses." Lower costs mean higher margins, which mean better returns for investors. What it means for residents is another question entirely.

By the fourth quarter of 2023, investors accounted for 18% of all home sales nationwide. They made up an even larger share of the low-price market, directly competing with first-time homebuyers for starter homes. The American Dream of homeownership wasn't dying naturally—it was being bought out from under the next generation.

The Shrinking Marketplace

The consolidation of healthcare and housing represented just two fronts in a broader transformation of the American economy. Across virtually every sector, the number of competitors was shrinking while the power of the largest players grew.

In 2000, the top five companies controlled at least 80% of revenue in 71 of the 157 primary industries tracked by S&P Global Market Intelligence. By 2021, that number had grown to 91 industries. The market power of the biggest five companies increased in 105 industries and decreased in just 38. This happened as the total number of U.S. public companies plummeted from 7,887 in 2000 to 4,947 in 2021—a decline of more than 37% driven by trillions of dollars in mergers and acquisitions.

The year 2021 set an all-time record for merger activity. At the current pace, economists calculated, the country would consolidate down to a single company by 2070. The projection was tongue-in-cheek, but the trend was real.

The consolidation touched every corner of American life. CVS came to dominate pharmacy services through a series of acquisitions—Longs Drug Stores in 2008, Target's pharmacy business later, and ultimately a $69 billion merger with Aetna in 2018 that the Justice Department approved despite concerns about reduced competition. In communities across the country, residents found themselves with six CVS locations nearby and few alternatives.

Meatpacking consolidation left family farmers and ranchers struggling to earn fair prices as a handful of companies gained power to dictate terms. Walmart's expansion into rural areas drove local grocery stores out of business, leaving communities dependent on a single retailer that could extract more than it contributed to local economies.

The mechanism enabling much of this consolidation flew under the regulatory radar. "Serial acquisitions" and "roll-up strategies" allowed companies to become dominant by buying several smaller firms in the same sector, with each individual transaction falling below the thresholds that would trigger federal antitrust review. By the time regulators noticed, the consolidation was complete.

In February 2024, the Justice Department and Federal Trade Commission launched an inquiry into these practices, acknowledging that "these serial acquisitions can reduce competition across an entire industry or business sector, which harms consumers, workers and innovation." But the inquiry came after decades of unchecked consolidation had already reshaped the economy.

The Extraction Economy

Understanding how private equity operates is essential to understanding what happened to America's essential services. The model is elegant in its simplicity and brutal in its execution.

First, identify a fragmented industry with steady cash flow—healthcare, housing, veterinary services, funeral homes. Second, execute a leveraged buyout: borrow heavily, often 70-90% of the purchase price, using the target company's own assets as collateral. Third, load the acquired company with that debt. Fourth, implement "operational improvements"—which typically means cutting costs, raising prices, and standardizing services. Fifth, execute a dividend recapitalization, pulling cash out of the company to pay investors even before selling. Sixth, after five to seven years, exit through a sale to another private equity firm (a "secondary buyout"), a sale to a strategic buyer, or an initial public offering.

The beauty of the model, from an investor's perspective, is that the private equity firm puts up relatively little of its own money while maintaining control and reaping outsized returns. The risk is transferred to the acquired company, its employees, and its customers.

Sale-leaseback transactions exemplify the extraction mentality. A private equity firm buys a company that owns its real estate, immediately sells the property to a real estate investment trust, and leases it back to the operating company. The private equity firm pockets the cash from the real estate sale while the operating company is left with both debt payments and rent obligations. When ZT Group sold the real estate for seven of its Texas emergency care facilities and leased them back in 2024, it claimed the deal would "de-lever" the balance sheet. What it really did was convert owned assets into ongoing expenses while extracting immediate cash.

This model is fundamentally incompatible with providing sustainable essential services. A hospital, nursing home, or apartment building requires long-term investment in maintenance, staff, and community relationships. The private equity model demands maximum extraction in minimum time. When those imperatives collide, it's not the investors who suffer.

Who Benefits, Who Pays

The winners in this transformation are clear: private equity partners, institutional investors, and the limited partners who invest in their funds—often pension funds and university endowments seeking high returns. The losers are more numerous and more vulnerable.

Workers face union-busting campaigns, wage suppression, and job cuts following acquisitions. When a non-profit blood bank acquired and merged with 18 local blood banks across the country, one worker reported that "the mergers were used to break union contracts, fire union staff, and overall get rid of unions and unionized employees." The pattern repeated across industries.

Patients and tenants experience worse service, higher costs, and vanishing accountability. When a nursing home is owned by a limited liability company that's owned by a holding company that's managed by a private equity firm, the chain of responsibility becomes so diffuse that holding anyone accountable becomes nearly impossible. A recent settlement in Minnesota illustrated the problem: after the state sued a syndicate of six entities that owned rental properties under a common brand, some defendants claimed they were merely investors, not owners. The courts eventually determined they were responsible, but renters often don't have the resources to pursue such cases.

Communities see wealth extracted rather than reinvested. When a local hospital is acquired by a private equity firm, profits that once stayed in the community—funding charity care, supporting local suppliers, paying local taxes—are instead funneled to investors scattered across the globe. The hospital becomes a mechanism for transferring wealth from the community to distant shareholders.

The risks, meanwhile, are socialized. When private equity-backed healthcare companies go bankrupt—as seven of the eight largest did in 2024—it's patients who lose access to care, workers who lose jobs, and communities that lose essential services. The private equity firms have already extracted their returns and moved on.

Can the Pieces Be Reassembled?

By 2024, the backlash was building. State legislatures began proposing restrictions on institutional investor purchases of single-family homes. California considered at least three bills: one would ban institutional investors from buying additional single-family homes to rent out, another would prohibit them from purchasing or leasing single-family homes for any reason, and a third would ban bulk sales of homes to large investors.

The Biden administration appointed aggressive antitrust enforcers to the Federal Trade Commission and the Justice Department's Antitrust Division. They updated merger guidelines, challenged major acquisitions, and launched investigations into serial acquisitions and roll-up strategies. The FTC moved to block Microsoft's takeover of Activision Blizzard. The Justice Department filed monopolization claims against Apple, Amazon, Meta, and Live Nation/Ticketmaster—two and a half times as many as the previous administration.

But the efforts faced enormous headwinds. The private equity industry had grown sophisticated in its lobbying, creating trade associations and funding research to defend its practices. The single-family rental industry formed its own lobby to fight state restrictions. And the fundamental legal framework—decades of precedent favoring corporate consolidation—remained largely intact.

The deeper question is whether essential services should be treated as assets for financial engineering at all. Should the nursing home caring for your parent be optimized for investor returns or for quality of care? Should your neighborhood be a portfolio diversification strategy or a community? Should your doctor's treatment decisions be influenced by the need to generate returns for distant shareholders?

These aren't abstract questions. They determine whether Americans can access affordable healthcare, whether young families can buy homes, whether small businesses can compete, and whether communities can thrive or merely survive as sites of extraction.

The path forward requires multiple interventions. Regulatory reform must close the loopholes that allow serial acquisitions to escape antitrust scrutiny. Transparency requirements must pierce the corporate veils that obscure ownership and accountability. Antitrust enforcement must be sustained and strengthened, not abandoned when political winds shift. And perhaps most fundamentally, policymakers must grapple with whether certain services—healthcare, housing, education—should be shielded from the most aggressive forms of financial engineering.

The stakes couldn't be higher. The question isn't whether America has been sold for parts—the deals have already closed, the dividends have been paid, the wealth has been extracted. The question is whether what remains can be reassembled into something resembling the country Americans thought they lived in: a nation of communities rather than a portfolio of assets, a place where essential services serve people rather than distant investors, an economy where prosperity is built rather than merely extracted.

The pieces are still there, scattered across balance sheets and corporate structures. But reassembling them will require confronting the fundamental choice that America has been avoiding: whether the country's essential institutions exist to serve its people or to generate returns for its wealthiest investors. The answer will determine not just the economy Americans inhabit, but the kind of society they become.