Joint Economic Committee report highlights how private equity threatens healthcare, economy
October 1, 2024
In July 2024, the Democrats of the Congressional Joint Economic Committee (JEC) released a report highlighting the threats posed by private equity to the US healthcare system and the economy at large.[1]
The report, Predatory Private Equity Practices Threaten Americans’ Health and the Economy, connects private equity’s growing influence in the healthcare industry with the declining quality of care at private equity-owned hospitals and nursing homes. According to a press release accompanying the report, private equity firms have been associated with potential overprescription of procedures, shortages in medical devices, and poorer quality of care outcomes.[2]
The release of this report has followed a trend of growing interest by lawmakers in the impacts of private equity acquisitions of healthcare providers. Members of Congress have taken several steps to scrutinize the industry, including launching an investigation into private equity-owned hospitals, questioning predatory wealth extraction practices, and working to close tax loopholes that specifically benefit private equity and other private funds.[3]
In its analysis, the report cites the Private Equity Stakeholder Project’s (PESP) Private Equity Risk Index and Hospital Tracker. Importantly, Senator Martin Heinrich is Chairman of the JEC, and his state of New Mexico received the highest risk score in the Risk Index:[4]
“New Mexico is at the highest risk of being exploited by private equity firms. While private equity can be an important tool for struggling businesses, harmful practices by unregulated private equity firms can shut workers out of good-paying jobs and threaten Americans’ health. That needs to end,” said Senator Heinrich. “I will keep working to make sure patients aren’t harmed by predatory practices of private equity firms.”[5]
If you have any questions about the report by JEC Democrats, please contact PESP’s Policy Director, Chris Noble, at chris.noble@pestakeholder.org.
[1]https://www.jec.senate.gov/public/index.cfm/democrats/2024/7/private-equity-practices-threaten-the-health-care-system-and-economy
[2]Id.
[3]Id.
[4]https://privateequityrisk.org/state/new-mexico/
[5]https://www.jec.senate.gov/public/index.cfm/democrats/2024/7/private-equity-practices-threaten-the-health-care-system-and-economy
