FOR IMMEDIATE RELEASE

June 5, 2024

CONTACT
Carter Dougherty
carter@ourfinancialsecurity.org

Groups Call on Federal Agencies to Fight Private Equity Abuses in Health Care
Demands include steps for competition to curb private equity role in driving corporate greed

Today over 90 organizations and individuals, representing patients, workers, communities; public interest advocates, and health care researchers, called on federal authorities, as part of their review of competition in health care, to take action to curb the abuses of private equity and safeguard the ability of doctors to deliver quality care to all patients and achieve equitable health outcomes.

“Health care professionals and institutions should be concerned above all with their patients’ well-being and the nation’s health, but they are too often treated as financial instruments, to be bought and sold, mortgaged and plundered, for investors to reap huge profits,” said Robert Seifert, senior fellow at Americans for Financial Reform Education Fund. “These business practices have further preyed on low-income patients, people with disabilities, and communities of color who have long been shut out of our healthcare system.”

The groups endorsing these recommendations include the AFL-CIO, SEIU, AFT, Private Equity Stakeholder Project, Community Catalyst, Consumer Voice, Next100, and Public Citizen.

In a detailed response to a request from three federal agencies, the groups proposed solutions to reduce corporate greed in healthcare, and promote fair competition in healthcare in a manner that reduces the incentives and ability of private equity to acquire and squeeze companies without regard to their long-term viability or ability to provide quality care. (AFR-EF submitted its own comment to the agencies as well.) Those steps include:

• Scrutinize and challenge private equity’s practice of “roll-up” acquisitions, common across health care, as an unfair method of competition that consolidates markets but evades antitrust enforcement.
• New reporting requirements for private equity and real estate investment trusts on ownership of healthcare companies, and requiring states to collect information from Medicaid nursing facilities.
• Adjust incentives in Medicare Advantage by tying payment more securely to quality, as the concept of value-based payment intends, and closely monitoring improper denials of care, so that it does not reward profit seekers such as private equity firms.
• Combat unfair practices by health care entities owned or managed by private equity companies with actions and rules to prevent unfair methods of competition.
• Prosecute health care fraud and cease contracting with private equity firms for healthcare in correctional facilities.
• Use the False Claims Act to prosecute and reverse inflationary billing practices – from unwarranted upcoding, payments to related parties, and other methods – by health care entities owned or managed by private equity companies.
• Forbid private equity-owned companies from providing health care and other services to those incarcerated in the federal prison system and provide incentives for state prison systems to eliminate private equity from their correctional health systems.
• Encourage providers and other staff at health care entities to come forward with allegations of substandard care or improper billing and establish a portal for whistleblowers to report these claims
• Report information in a user-friendly manner to promote transparency

The groups made the demands in the form of comments to the Department of Justice (DOJ), Federal Trade Commission (FTC), and Department of Health & Human Services (HHS) as part of a Request For Information made by the agencies on the impact of corporate greed in health care. The comment period ended today.

The federal focus on private equity in healthcare reflects not only the massive growth of this Wall Street creation, but the dangerous inroads it has made over the last decade. In 2021 alone, private equity was involved in healthcare-related transactions worth $209 billion. At the same time, researchers have accumulated evidence linking the presence of private equity, and consolidation in particular, to worsening health outcomes.

“For decades, private equity firms have exploited entities across the health care landscape for financial gain, at the expense of the health and health care access of countless communities, many with few other options,” Seifert said. “But if federal policy can push the healthcare business away from simple extraction to vibrant competition, it can tip the balance toward better treatment and healthier patients, and a more equitable system overall.”

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