SPRINGFIELD –Senator Graciela Guzmán’s bill to monitor private equity in our health care system passed the Senate.
“Health care is not a luxury to be profited off of, but a human right,” said Guzmán (D-Chicago). “We have seen private equity take over portions of our economy and sell off whole industries for parts. We need to understand how much of Illinois’ health care system is controlled by private equity and how it affects both care and access to it. .”
Guzman’s measure would require health care facilities and health care provider organizations, which are parties to a transaction involving a merger or acquisition (i.e., a "covered transaction") to provide notice of the transaction to the Office of the Attorney General. This includes parties to the transaction that are not a health care facility or provider organization but own or control, directly or indirectly, one or more of the two or more health care facilities or provider organizations that will be under common ownership.
Chicago has faced the growing trend of health deserts because of private equity’s involvement in health care. According to the Private Equity Stakeholder Project, closures of West Suburban Medical Center, Weiss Memorial Hospital and Westlake Hospital were all attributable to ownership by private equity company Pipeline Health. Pipeline employed strategies to boost profit by monetizing hospital assets that led to a weakening of the hospitals.
This follows a broader national trend of private equity’s involvement in hospital ownership. According to the Private Equity Hospital Tracker, 488 hospitals in the US are currently owned by private equity firms. This represents almost 23% of all for-profit hospitals. Firms that are engaged in this practice include equity giants such as Apollo Global Management, Bain Capital, and Equity Group Investment–which is based in Chicago–among others. The results have been disastrous for underserved communities with safety net hospitals being stripped for profit.
“Private equity is exploiting the health care system for profit when everyday people are just trying to get the care they need,” said Guzmán. “Using our antitrust powers for oversight is the first step in stopping a private equity takeover in health care.”
House Bill 5000 passed the Senate on Wednesday and heads back to the House for concurrence.
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