PESP endorses Health Over Wealth Act to ensure accountability in healthcare

Senator Markey, chair of the Health, Education, Labor, and Pensions (HELP) Subcommittee on Primary Health and Retirement Security, and Congresswoman Jayapal introduced the Health Over Wealth Act, targeting transparency and accountability for private equity firms and for-profit companies in the healthcare sector. The legislation aims to protect workers and patients by implementing safeguards and closing tax loopholes benefiting real estate investment trusts. Initially discussed in April at a subcommittee hearing led by Senator Markey, the bill has been strengthened to include disclosure of union-busting agreements, increased penalties, and provisions to prevent actions that could harm healthcare quality or access.

The Health Over Wealth Act would require private equity-owned health care facilities to publicly report their debt, executive pay, lobbying and political spending, healthcare costs for patients and insurance plans, and any reductions in services, wages, or benefits. It mandates that these firms set up escrow accounts to cover five years of expenses to ensure the continuation of care in the event of hospital closures or service reductions. The Department of Health and Human Services would be authorized to revoke investment licenses from private equity firms that engage in price gouging, understaffing, or creating barriers to care.

Additionally, the bill establishes a task force to review the role of private equity and consolidation in healthcare, including how market trends create or exacerbate healthcare disparities. It prohibits private equity firms from stripping assets from healthcare entities or undermining the quality, safety, or access to healthcare and closes tax loopholes for real estate investors to disincentivize the sale of healthcare properties followed by exorbitant rental fees. Lastly, it includes provisions to prioritize workers in bankruptcy payouts and requires bankruptcy courts to consider the impact on healthcare access and employment.

PESP supports this legislation, and PESP policy director Chris Noble released the following statement about the bill.

“We believe that private equity’s profiteering in healthcare is just the tip of the iceberg. Still, it has been nearly impossible to hold private equity firms accountable even when it’s clear that their financial tactics harm patients and workers. That’s because private equity firms largely operate in the shadows. These firms rely on the fact that as of now, there is very little oversight over what they do and how they make their money.

“We have seen the largest concentration of private equity-owned hospitals in states where there is little to no regulation of for-profit hospital ownership. In the worst cases, these PE firms have free rein to use healthcare providers to line their own pockets.

“Private equity exacerbates the kinds of extractive tendencies that for-profit healthcare systems frequently exhibit, and private equity firms frankly get away with their schemes because complex corporate structures shield firms from transparency and accountability. On top of these private equity-specific issues, current regulatory loopholes, combined with poor or nonexistent enforcement of existing regulations, have enhanced profiteering opportunities for these private equity firms.

“It’s therefore critical for policymakers to pass legislation, and for regulators to propose rules that increase transparency and accountability for private equity investments in healthcare. The new Health over Wealth Act is going to provide a much more expansive toolbox to be able to identify and regulate private equity actors in the health industry. This is a great step toward mitigating the destruction wrought by private equity in healthcare.

“We must be serious about the real and everyday impacts of private equity healthcare profiteering and give stakeholders the means to hold Wall Street accountable.”