I ripped into the Wall Street Journal last week in my blog. In a front-page article, it decried the “downside” of hospitals popping up all over the country at a time when our factories are slowly but surely disappearing. The main problem with this? It results in an economy overly dependent on Medicare and Medicaid, according to the Journal article.

In my blog I said that misses the main point. Factories make things. They add to the material wealth of the country. Hospitals don’t. You visit a hospital. You get better (or you don’t). The GDP goes up by $50,000 to $150,000, which is nice for politicians to point to. But the economy doesn’t have anything tangible to show for it.

True, hospitals are hard assets. But you need to understand this important fact: Operators that invest their own cash in hospital real estate never generate revenue from the investment. The hospital gets nothing out of owning it. No rental fee. No usage fee. They make money from using that space to offer additional services…

But, at a fraction of the cost, they could have rented out that empty building on Main Street and offer those same additional services. Hospitals are the very definition of a non-earning asset.

But now I’m having second thoughts. If hospitals are just so much deadweight on the economy, then what about other entities that cater to health? What about spas? They’re like new-age hospitals, aren’t they? If we’re including spas, then are hotels that much different? And aren’t hotels just big restaurants with beds?

Really, it comes down to the fact that hospitals are in the service industry. Should we condemn them for that? At least they try to improve or prolong valuable earning assets … namely, us. Doesn’t that count for something?

I think I owe the Wall Street Journal an apology. Hospitals popping up all over the country are no better or worse than Starbucks appearing on every other corner. Starbucks already had their run when they made investors a ton of money. It’s hospitals’ turn now.