Healthcare groups, unions and hospitals are weighing in on a proposed bill in California that would strengthen review of private equity deals in healthcare.
California Attorney General Rob Bonta and Assembly Speaker Pro Tempore Jim Wood introduced the bill in February. It remains pending in the state Legislature.
If passed, the bill would require private equity groups and hedge funds to notify the attorney general and obtain their written consent before a transaction with a healthcare facility, provider or provider group. It would also reinforce the existing prohibition on private equity groups and hedge funds interfering with the professional judgment of physicians, psychiatrists, or dentists in making healthcare decisions.
The California Hospital Association opposes the bill, saying it would add costs to the state and reduce healthcare access.
"Unfortunately, the recently proposed amendments do not resolve CHA's concerns and create new questions," the group wrote in an Aug. 9 letter to the Senate Appropriations Committee.
The letter states that the amendments do not remove hospitals from the bill and "go beyond private equity groups and hedge funds by imposing a new AG review process on nonprofit hospitals."
The California Medical Association supports provisions of the bill that maintain the autonomy and integrity of the patient-physician relationship in medical decision-making.
The association wrote to lawmakers in support, stating: "Given the dangerous consequences PE has on cost, quality and access to care for all Californians, CMA respectfully requests that the bill move forward to ensure appropriate review of PE transactions and protect the patient-physician relationship against private equity in the healthcare delivery system."
Other groups supporting the legislation include the California Academy of Family Physicians, California Dental Association, California Nurses Association, California Physicians Alliance and California Labor Federation. Other groups opposing the legislation include American Investment Council, Association of Dental Support Organizations and the California Chamber of Commerce.
Editor's note: This article was updated at 11:03 a.m. CDT on Aug. 14.