Spurred by a recently proposed radiology-related M&A deal, two U.S. senators are seeking to curb what they call “corporate greed” in healthcare.
Sens. Edward J. Markey and Elizabeth Warren, both Massachusetts Democrats, held a hearing on this topic Wednesday in Boston. They’re concerned, in part, by UnitedHealth Group’s proposal to purchase Steward Medical Group—a multispecialty radiology provider that spans nine states.
Previously owned by private equity firm Cerberus Capital Management, the investor group reaped $800 million in profit from Steward and left the organization in financial peril.
“Today's hearing revealed how a billion-dollar deal that enriched Steward's private equity owners and its CEO left the hospitals in shambles,” Warren said in a statement issued April 3. “We need to hold the executives who drove these hospitals into financial collapse accountable and ensure private equity can't repeat this same trick.”
As part of this push, Markey recently introduced a draft version of proposed legislation dubbed the “Health Over Wealth Act.” The bill would require greater transparency in healthcare entity ownership and put safeguards in place to protect physicians while preserving access. It also would “elevate the voices” of workers and communities in regulating healthcare while monitoring closures and service reductions following corporate acquisitions. Markey said he is accepting public comment on the proposal until May 3.
The hearing comes amid growing interest in radiology from private equity and other types of investors. A recent study found that PE ownership in radiology groups is increasing, with some corporate entities holding a dominant market share in certain geographies. They used this new market power to increase prices for radiology services, another analysis concluded.
“The emergency department serves as the front door to the community and what we are seeing is an alarming indication that we are way beyond the breaking point,” ED physician Ellana Stinson, MD, MBA, president of New England Medical Association, said in the same statement. “If we don’t act now, these financial practices in medicine will have rippling effects on this country that permeates far beyond healthcare. We should all be concerned.”
You can watch a full recording of the hearing here and read testimony from Stinson and others.
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.