Parking Lot Pimpin’, Function Health Acquires AI MRI Co, 340B Drives Hospital Acquisitions

Hey all,

Happy Tuesday! As I read Adam Fein’s recent post on hospital acquisitions, I couldn’t help but think about General Catalyst’s acquisition of Summa Health. Summa is being converted from a non-profit to a for-profit system, which means it will lose eligibility for the 340B program—a program that is the number one profit driver for many hospitals. I can’t imagine that doesn’t leave a significant hole in Summa’s budget. Enjoy the rundown! 

Jacob Brody (Co-Founder & CEO, ZorroRX)

(STAT News) Texas Medical Center Parking Profits

The Texas Medical Center in Houston collected $81 million from parking fees last year—more than half its total revenue—by operating over two dozen garages and charging visitors up to $33 on average per visit. This underscores how hospital parking, often a frustrating expense for patients and families, serves as a major financial engine, with TMC further bolstering its funds through $33 million in investment income tied to these fees; as Bob Herman wryly notes, TMC is basically a hedge fund funded by parking fees that happens to do some health care on the side. Full Article

(Fierce Healthcare) Function Health Acquires Ezra to Create All-in-One Preventive Health Platform 

Function Health has acquired AI-powered imaging startup Ezra to merge its expansive lab testing services with full-body MRI scans, aiming to offer the first fully integrated personal health platform. The move positions Function to provide continuous, comprehensive health insights by combining over 160 biomarker tests with rapid, lower-cost AI-enhanced imaging that can screen for more than 500 conditions—and now offers Ezra’s full-body MRI scans for $500 with a Function membership. By democratizing both lab testing and advanced imaging, the merged company seeks to set a new standard of preventive care, with immediate availability at nearly 100 locations and planned expansion to 1,000 nationwide. Full Article

(LinkedIn - Adam Fein) 340B and Hospital Consolidation

Adam Fein points to a new analysis of CMS hospital ownership data that shows from 2016 to 2024, acquiring hospitals were more likely to be 340B covered entities (70.1%) compared to the national average (58.7%), while hospitals being purchased were far less likely to qualify for 340B (23.9%). This trend indicates that the 340B program may be a factor accelerating hospital consolidation, with implications for drug pricing strategies and healthcare market competition.These statistics are unsurprising given that 340B is the number one profit driver at most hospitals. Full Article