States' policy efforts to manage private equity in healthcare are examined in an Oct. 18 Commonwealth Fund blog post.
In Commonwealth Fund's "To the Point," former foundation President David Blumenthal, MD, notes that without congressional action, states will be central in policy action to manage for-profit ownership by private investors of healthcare providers and facilities.
Here are six takeaways from Dr. Blumenthal's post:
1.Congressional policy action on private equity in healthcare is unlikely in the near future. Dr. Blumenthal said this is because legislation to address the issue "require[s] 60 votes in the Senate, which seem unlikely to materialize. Therefore, any meaningful federal action depends on the executive branch using existing authorities."
2. In states, action on private equity in healthcare is limited. As of Oct. 18, five states — California, Indiana, Minnesota, New Mexico and Oregon — have programs that directly or indirectly regulate the issue.
3. In four states — Massachusetts, New Jersey, New York and Pennsylvania — potentially viable bills are pending.
4. California Gov. Gavin Newsom recently vetoed a bill that would have further clamped down on private equity healthcare deals. Mr. Newsom said the bill was redundant with existing state authority to review and evaluate healthcare deals.
5. Dr. Blumenthal said most current state laws require that healthcare transactions of a certain size involving private equity are disclosed to the state. He added that sometimes the state requires previous approval by a designated state official, and no states have enacted all the provisions in model legislation from the National Academy for State Health Policy.
6. Dr. Blumenthal said "the results of the 2024 election may significantly influence the future of private equity in healthcare." He added that private equity could become "another factor dividing healthcare systems in conservative and progressive states and potentially affecting healthcare performance in parts of the United States that already demonstrate poorer population health outcomes and higher uninsurance rates."
Read the full blog post here.