Published on

Congressional leaders are doubling down on their scrutiny of how private equity (PE) ownership may potentially be influencing care within PE investor’s portfolios of healthcare companies, according to a summary from Axios. One Senate proposal entered into discussion recently suggests that the Department of Health and Human Services (HHS) should have the authority to halt certain healthcare PE transactions by creating licensing standards for firms before they can invest in healthcare assets. Leaders are also looking to increase transparency since PE firms do not have the same reporting requirements as public companies. The volume of PE transactions in the industry has increased, catching the attention of lawmakers and patient advocates. For example, the number of physician practices acquired by private equity firms increased by more than 600% from 2012 to 2021, according to Health Affairs. The Federal Trade Commission, Justice Department, and HHS have opened public comment regarding healthcare ownership through May 6, 2024. Comments can be submitted here.

On the balance: While the crux of the matter relates to how for-profit PE ownership may be influencing patient care and quality, PE can also bring much-needed investment and economies of scale in a time of increased operating costs. Definitive Healthcare notes that PE deal activity in the United States reached a peak of $208 billion in 2021. The emergence of new regulations could slow the pace of investment in the future.

Congress Considers PE Licensing For Healthcare Investments