California is considering expansion of oversight of private equity firms and hedge funds, requiring them to gain approval from the state’s attorney general before purchasing health care facilities. The proposed legislative measure, known as A.B. 3129, comes as the growth of private equity’s presence in health care over the past ten years comes under increasing scrutiny. This expansion has led to these firms acquiring hundreds of hospitals, nursing homes, and provider groups.
The author of the bill, Assembly Speaker Pro Tempore Jim Wood (D), argues that these deals warrant further review to gain a better understanding of the potential impacts on competition, costs, and the quality of care. Increased oversight by the state could potentially serve as a checkpoint to prevent unfavourable outcomes for the health care sector and its patients.
However, this legislation could also face significant opposition from private equity firms and hedge funds, possibly sparking a debate on the extent of regulatory involvement in the private sector. This scenario is emblematic of a broader national dialogue about the role of private equity in health care and whether greater oversight and regulation are needed.
For more details, please read more about it in the original article on Bloomberg Law.