LA Times : California bill would require state review of private equity deals in healthcare

Supporters of the bill, including consumer advocates and labor unions, view it as necessary to curb the negative impact of private equity on healthcare. They cite studies showing a correlation between private equity acquisitions and price hikes without corresponding improvements in care. Additionally, supporters of the bill emphasize that stricter oversight is essential to protect patient care and prevent financial risks linked to private equity involvement.

From the story:

That was a factor in the financial collapse of Steward Health Care, a multistate hospital system that was owned by the private equity firm Cerberus Capital Management from 2010 to 2020, according to a report by the Private Equity Stakeholder Project, a nonprofit that supports the California bill. Steward filed for Chapter 11 bankruptcy in May.

The Private Equity Stakeholder Project supported the original form of the legislation before amendments were introduced. However, latest version of the California bill was watered down as lobbyists succeeded in having for-profit hospitals and dermatology practices excluded from the legislation. Some $583,000 was spent lobbying against the measure, according to state financial reporting records.

The PESP public testimony in support of the original bill can be found here and here.

PESP still supports the bill because the legislation remains a positive step to strengthen oversight on private equity ownership and operation of healthcare companies.