Regulating private equity in health care: a strategic policy agenda

Private equity (PE) has played a large and growing role in shaping the American health care landscape. Over the past decade alone, PE investments have approached $1 trillion, with private capital targeting nursing homes, long-term care facilities, hospitals, general physician groups, and specialty clinics. As PE activity has expanded, so, too, has a body of literature questioning its implications for the cost, quality, accessibility, and equity of care. Despite mounting evidence of harm, antitrust authorities have struggled to keep pace. Today, however, there is growing political will for reform, driven by regulators who have recognized that PE's outsized footprint makes it an urgent target for policy intervention. This article outlines the essential role of regulatory initiatives in shaping a more responsible future for PE in health care. We contend that robust policy must, at a minimum, shield patients, providers, and practices from PE's associated risks, and, at best, position these parties to benefit from private investment. Accordingly, this manuscript emphasizes how state and federal regulators can usher in a new era of health care PE. Most fundamentally, this involves empowering antitrust authorities and strengthening existing policies to increase accountability, promote competition, and curb consolidation. In parallel, we encourage policy makers to pursue innovative regulatory solutions, including health care-specific PE law, alignment of state and federal oversight, adoption of alternative payment models, and strengthened patient protections against PE-associated clinical and nonclinical risks. Lastly, we underscore the importance of learning from international policy makers who have embraced comprehensive health care PE oversight.