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Legislators focus on private equity’s role in healthcare as Steward faces challenges

Financial troubles have put Steward Health Care in a difficult position, but the involvement of private equity in the healthcare industry in Massachusetts has been increasing for a long time. According to officials, it is not just one for-profit system that is affected by this trend.

Between 2013 and 2023, the Health Policy Commission (HPC) examined 182 provider purchases and sales. The data revealed that the share of transactions involving private equity interests more than doubled during this period. In 2016, private equity was involved in about 25 percent of transactions. This figure increased to 47 percent between 2017 and 2020 and to 63 percent between 2020 and 2023.

Leaders at the HPC have been discussing this trend since December, but the issues at Steward have brought them into sharper focus. The HPC Executive Director David Seltz highlighted the need for urgent action to address the challenges posed by private equity, for-profit ownership, and industry consolidation in the healthcare sector.

The Health Care Financing Committee has been tasked with investigating gaps in the state’s regulatory framework and proposing policy changes to prevent similar problems at other facilities. Seltz also mentioned that the HPC was not informed about the acquisition of Steward’s Massachusetts properties by Medical Properties Trust, which led to significant financial difficulties for the company. The situation is still developing as lawmakers look into how they can better regulate these types of transactions to prevent future crises like this one from happening again.

By Samantha Jones

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