Bill to Ban Private Equity from Owning Medical Practices

If you are a doctor, your practice ownership and decision-making power may soon be protected from private equity firms.

Senator Elizabeth Warren, alongside 12 other Democratic lawmakers in the Senate and House, has introduced legislation to ban private equity firms and other for-profit corporations from owning medical practices. This bicameral bill is modeled after a successful Oregon law enacted this year, which has already been used by physicians to prevent corporate takeovers. The proposed legislation would also prohibit management services organizations from controlling medical offices. The move aims to curb rising healthcare costs, which have outpaced general inflation significantly, with medical care costs increasing by 121 percent between 2000 and 2004, compared to 86 percent for the broader consumer price index. Private equity investment in healthcare surged from $5 billion in 2000 to $104 billion in 2024, with research linking private equity ownership to worse patient outcomes and higher costs, particularly in nursing homes. The bill seeks to ensure that patient care decisions remain with doctors rather than Wall Street investors and includes multiple enforcement paths through the FTC, state attorneys general, and a private right of action for physicians.

This legislative effort signals a growing bipartisan concern over the financialization of healthcare and its impact on patient care and costs. The trend of private equity increasing its stake in healthcare, evidenced by a jump from $5 billion in 2000 to $104 billion in 2024, has been linked to both increased costs and diminished patient outcomes. By proposing a ban, lawmakers aim to shift control back to medical professionals, arguing that profit-driven motives of investors conflict with patient well-being.

The bill's introduction suggests a potential turning point in the debate over corporate influence in medicine, with implications for how healthcare services are structured and financed across the country. The inclusion of multiple enforcement mechanisms, including a private right of action for physicians with treble damages, indicates a robust attempt to make the prohibition effective and deter future corporate acquisitions of medical practices.