The bill's backers say the profit-first approach isn’t good for health care. But they're getting pushback from hospitals concerned about losing a potential funding source.
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“We preferred not to make that amendment,” Bonta said in an interview. “But we still have a strong bill that provides very important protections.” Critics note that private equity deals are often financed with debt that is then owed by the acquired company. In many cases, private equity groupsThat was a factor in the financial collapse of Steward Health Care, a multistate hospital system that was owned by the private equity firm Cerberus Capital Management from 2010 to 2020,by the Private Equity Stakeholder Project, a nonprofit that supports the California bill. Steward filed for Chapter 11 bankruptcy in May.
Researchers note that private equity investors are hardly alone when it comes to health care profiteering, which extends even to nonprofits.“It’s helpful to look at ownership classes like private equity, but at the end of the day we should look at behavior, and anyone can do the things that private equity firms do,” said Christopher Cai, a physician and health policy researcher at Harvard Medical School.
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