California Could Curb Private Equity Health Deals

Antitrust officials and members of the general public have also taken note of the presence of private equity-backed roll-ups in a number of other fields, ranging from property management technology to insurance sales, along with the growing presence of other types of asset managers, such as real estate investment trusts, in areas such as ownership of single-family homes and ownership of student housing.

AB 3129 details: Rob Bonta, the current California attorney general, sponsored AB 3129.

Assemblymember Jim Wood, D-Medocino, introduced the bill in February.

Assemblymember Mia Bonta, D-Oakland, Calif. — who is Rob Bonta’s wife and the Assembly Health Committee chair — presided over a hearing on the bill in April.

The Assembly passed the bill by a 50-16 vote May 21.

The Senate Health Committee and the Senate Judiciary Committee now have jurisdiction.

The Senate Health Committee has scheduled a June 26 hearing.

Interest groups: The list of groups that opposed the bill as of April 9 includes the California Chamber of Commerce and the California Hospital Association.

The hospital association says California needs to encourage more investors to come in and help alleviate the state’s hospital capacity shortage, not scare investors away.

The list of groups supporting the bill includes the Purchasers Business Group on Health and the Small Business Majority.

“Studies have shown that private equity acquisitions have negative impacts on costs, quality, and access to care,” William Kramer, a PBGH senior advisor, wrote in a comment letter in April.

“Comparing communities where private equity dominates physician specialties, a study found that price increases are up to 3 times higher; and a recent study found that private equity ownership in U.S. hospitals was associated with a 25 percent increase in hospital-acquired conditions, which was driven by falls and central line-associated infections,” Kramer said.

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