News Release: Biden Should Use Existing Tools to Reform Private Equity in Health Care


July 11, 2023

William Pierre-Louis, Jr.
(347) 499-7874

Biden Should Use Existing Tools to Reform Private Equity in Health Care

Washington, D.C. – The Biden administration and Congress should use all available means to curb the increasingly harmful effects of private equity’s control of massive swaths of the healthcare sector, according to a new report from Americans for Financial Reform Education Fund.

“We don’t need to wait for further tragedies caused by private equity ownership,” said Robert Seifert, a senior fellow at AFR-EF and author of the report. “There are traditional tools that federal agencies can use and loopholes Congress can close to end the siphoning of public healthcare resources for private profit, which erodes the quality of care and exacerbates patient suffering nationwide.” 

The report, Doctored by Wall Street, includes a detailed analysis (Part 2) of how Wall Street’s leveraged buyout business has taken health care by storm over the last decade, resulting in degraded patient care, immense pressure on physicians and nurses, and financially distressed companies, due to private equity’s extractive, debt-driven model.

Most importantly, the report also details novel federal policy solutions (Part 1) that can curb the abuses of private equity in health care, including administrative measures that do not require legislation from Congress and rely on traditional regulatory powers: 

  • Reduce incentives to game Medicare payment rules through regulatory fixes that curb excessive overpayments in the Medicare Advantage program. Complementary legislative action could close payment loopholes that favor certain types of services, sites of care, and prescribing practices over others.
  • Step up enforcement of existing anti fraud laws by seeking maximum penalties for violations; identifying whistleblowers, such as physicians with negative experiences of PE ownership, to bring anti-fraud actions; increasing investigations of likely violations of laws prohibiting self-dealing; and better use and monitoring of individuals and entities barred from participation in Medicare and Medicaid because of past fraud convictions.
  • Strengthen antitrust laws and enforcement to address the PE strategy of small acquisitions that evade current federal merger guidelines. Executive branch agencies can update their merger guidelines to assess the wisdom of mergers from competitive, financial and public health perspectives; Congress can lower the financial thresholds for reporting health care mergers to antitrust agencies;
  • Shine a light on PE ownership of healthcare facilities and practices through regulatory actions requiring more extensive disclosure of ownership and financial relationships, and with greater public dissemination of this information.

“The time has come for action to curb the influence of Wall Street private equity in healthcare or at least mitigate some of its worst effects,” said Ricardo Valadez, private equity campaign manager with AFR-EF. “While we need thorough reform of this sector, executive branch agencies can deal with some of the worst manifestations of private equity in healthcare by using traditional tools already at their disposal to fight fraud, adjust payment incentives, prevent concentration, and improve transparency in ownership.”

Legislation introduced in Congress, the Stop Wall Street Looting Act, would reform the underlying economics of private equity.