Members of Congress introduce bill to rein in private equity ownership of physician practices
Members of Congress have introduced a bill aimed at reining in private equity ownership of physician practices and other healthcare entities.
Senator Edward J. Markey, D-Mass., and Rep. Pramila Jayapal, D-Wash., announced their Health Over Wealth Act on July 25, with backing from several others. The bill would require that PE-owned practices publicly report their debt load, executive pay, lobbying activities, healthcare costs and service reductions.
Markey and colleagues also want to force these firms to obtain a license from HHS to invest in healthcare entities. If a PE group were to price gouge, understaff or reduce access to care after an acquisition, the administration would have the ability to revoke their license and force divestiture.
Massachusetts’ junior senator has crusaded against PE ownership amid ongoing problems at local hospitals previously owned by private equity firm Cerberus Capital Management. Steward Health Care recently announced the closure of Nashoba Valley Medical Center in Ayer and Carney Hospital in Dorchester, which Markey slammed on July 26.
“Private equity firms and greedy corporate executives are using the healthcare system as a piggybank,” Markey said in a statement announcing the legislation. “But putting profit over patients results in substandard care, while health workers suffer, and communities are left to clean up the mess. This is what happened with Steward Health Care in Massachusetts. But the Steward crisis is just one symptom of a larger infection in our healthcare system that allows corporate wealth to come before the public’s health. We need to put in place permanent guardrails to protect patients, providers, and communities, and that is exactly what the Health Over Wealth Act provides.”
Along with physician practices, the act would apply to hospitals, nursing homes, hospice facilities, opioid treatment programs and behavioral health providers. It also includes several other provisions—establishing a task force to review the role of PE in healthcare, prohibiting firms from stripping assets after an acquisition, and closing tax loopholes for healthcare real estate investors.
Sens. Tammy Baldwin, D-Wis., Peter Welch, D-Vt., Jeff Merkley, D-Ore., Elizabeth Warren, D-Mass., Bernie Sanders, I-Vt., Cory Booker, D-N.J., Tina Smith, D-Minn., and Richard Blumenthal, D-Conn., are co-sponsoring the bill in the Senate. House supporters include Reps. Becca Balint, D-Vt., Val Hoyle, D-Ore., Eleanor Holmes Norton, D-D.C., and Mark Pocan, D-Wis. The legislation also is endorsed by the American Federation of State, County and Municipal Employees, Committee of Interns and Residents, Massachusetts Nurses Association, National Nurses United, Moral Injury of Healthcare, and the Private Equity Stakeholder Project, among others.
“The Steward hospital crisis is the unfortunate but inevitable consequence of allowing corporate greed to take over our healthcare system,” Taylor Walker, MD, a family medicine specialist and president of the Committee of Interns and Residents/SEIU, said in a statement. “A profit incentive in our hospitals fundamentally corrupts our healthcare system and harms our patients, our communities, and our healthcare providers.”
Markey and colleagues previously introduced a discussion draft of the bill in April. The legislation likely faces an uphill battle months ahead of a presidential election with no Republican supporters.
You can read previous coverage about private equity in radiology at the links below.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.