Private Equity’s Dominance in Massachusetts Healthcare Sparks Concerns, Regulatory Oversight Needed”.

Legislators focus on private equity’s role in health care following Steward Healthcare’s challenges

Private equity’s growing role in the healthcare industry in Massachusetts is causing financial challenges for Steward Health Care, drawing attention to the need for regulatory oversight. According to officials, private equity involvement in healthcare transactions has more than doubled in recent years, and this trend is expected to continue with industry consolidation, for-profit ownership, and private equity investment shaping the healthcare landscape.

The Health Policy Commission (HPC) has been monitoring this trend and revealed that private equity was involved in 25 percent of healthcare transactions between 2013 and 2016. This number increased to 47 percent between 2017 and 2020 and further rose to 63 percent between 2020 and 2023. This data highlights concerns about the impact of private equity on the healthcare system and the need for stronger regulatory oversight.

HPC Executive Director David Seltz emphasized the importance of addressing these issues to prevent future crises like the one facing Steward Health Care. He stressed that urgent action is needed to ensure the stability and sustainability of the healthcare system in Massachusetts. Legislative leaders have tasked the HPC with investigating regulatory gaps and proposing policy changes to address the challenges faced by healthcare providers.

A recent transaction where Medical Properties Trust acquired Steward’s Massachusetts properties without notifying HPC underscores the need for stronger regulatory oversight. As discussions continue, it is clear that the healthcare industry in Massachusetts is at a critical juncture, with private equity interests influencing its future and comprehensive regulatory reform needed.

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