Two congressional Democrats have introduced a bill that would impose new disclosure requirements for private equity firms that own healthcare entities, such as hospitals, nursing homes and mental or behavioral health facilities.
Sen. Ed Markey, D-Mass., and Rep. Pramila Jayapal, D-Wash., introduced the Health Over Wealth Act on July 25 in the Senate and House, respectively.
The bill would mandate private equity-owned healthcare facilities to publicly report their debt and executive pay, lobbying and political spending, healthcare costs for patients and insurance plans, and any reductions in services, wages or benefits. It would also authorize the Department of Health and Human Services to “revoke investment licenses from private equity firms that price (gouge), understaff, or create access barriers to care,” and establish a task force to review the role of private equity and consolidation in health care, according to a news release.
Private equity firms would be barred from “stripping assets from healthcare entities or undermining the quality, safety or access to healthcare,” the news release said, and the bill would close “tax loopholes for (real estate investment trusts) in order to disincentivize healthcare entities from selling their property and then paying exorbitant rents to these investors.”
Markey in April issued a discussion draft of the bill and sought public feedback.
“Private equity firms and greedy corporate executives are using the health care system as a piggybank,” Markey said in a statement. “But putting profit over patients results in substandard care, while health workers suffer, and communities are left to clean up the mess.”
In the same statement, Jayapal said private equity firms buying up healthcare systems is bad news for patients. “We have a duty to protect patients from greedy corporations that are prioritizing their bottom line over patient care,” she said.
A July 26 post on a website run by the American Investment Council, a private equity trade group, pushed back on the lawmakers’ claims and said private equity has been targeted as a scapegoat for broader, systemic challenges in America’s health care system.
The post makes the case that private investments in healthcare are limited and protect access for patients. It cites data from PitchBook stating that private equity-backed providers represent less than 4% of the U.S. healthcare provider ecosystem by revenue.
But the spotlight on private equity investments in healthcare is likely to continue.
Last month, Markey and Sen. Elizabeth Warren, D-Mass., introduced a bill that would create a new criminal penalty for private equity executives who “loot” healthcare entities.
