Private equity’s role in US healthcare remains unchecked after California veto
The nation’s most high-profile legislative effort to regulate private equity investments in healthcare,
and would have given the California attorney general discretion to deny mergers.
Its demise comes amid US Senate hearings over mismanagement at #Steward #Health,
a chain of more than 30 private equity-backed hospitals in Massachusetts whose CEO and investors siphoned “hundreds of millions” of dollars from community hospitals even as they developed one of the worst patient care records in the country.
“We’re really disappointed to see this bill was vetoed,”
said Katie Van Deynze, a legislative advocate for Health Access California,
a consumer advocacy coalition that lobbied in favor of the bill.
“There are a lot of other states and folks who were watching this.”
The bill received an endorsement this summer from #Lina #Khan, chair of the Federal Trade Commission,
the agency responsible for enforcing antitrust regulations.
A dozen other US states, including red states such as Indiana, either have merger review laws on the books or considered similar legislation this year.
Private equity investors have gained an enormous foothold in American healthcare in the last decade,
buying up $1tn worth of physician practices, hospitals, specialty practices and even hospice centers.
California alone has seen $20bn in private equity investment.
The bill, formally known as #AB3129, would have ⭐️ required private equity and hedge fund-backed buyers of certain healthcare businesses to seek the state attorney general’s approval 90 days before a deal was slated to close,
and given the attorney general the option to deny such mergers.
⭐️The bill would have also prohibited investor-owners from interfering with professional medical judgment of providers from dentists to psychiatrists, strengthening so-called corporate practice of medicine laws.
https://www.theguardian.com/us-news/2024/oct/05/private-equity-healthcare-california-veto?CMP=Share_iOSApp_Other