Criticism of governmental overreach and unintended consequences
Critics of the bill claim that creating more oversight in the health care sector is governmental overreach. Others agree that some regulation is necessary, but worry that this bill could have unintended consequences and deter well-intentioned, needed private equity investments.
“In some cases, private investment and the innovation that comes with it may be necessary to providing access to underserved areas,” said House Republican Leader Jesse Topper, who represents Bedford and Fulton counties and voted no.
But supporters argue that the bill doesn’t ban private equity in health care. Rather, it calls for more scrutiny in an effort to prevent other hospital closures at the hands of for-profit companies, said Democrat Lisa Borowski, the bill’s prime sponsor representing Delaware County.
“We have heard that there are instances where private equity can be a lifeline to service providers. We are not interested in preventing care or making access more challenging,” she said. “We are interested in making sure bad actors do not come to our commonwealth, target struggling health care facilities and sell off the parts for personal gain.”
Even among the bill’s supporters there was criticism that the legislation didn’t go far enough.
Republican Craig Williams, who represents Chester County and lives in Delaware County, called the final version of the bill “weaker” after amendments were passed “increasing the burden of proof that [the attorney general] has to establish to stop private equity from destroying our hospitals.”
“But sometimes, you just have to do a little bit of good,” Williams said. “I hope for you that you never have a hospital close in your county. I hope that private equity never comes into your county to take over your health care. But if it does, House Bill 1460 stands there for you, ready to give the attorney general the opportunity to give you a little bit of relief.”
Chances of passage in the Senate
State Sen. Kearney said Republican leadership in the Senate have shown an interest in considering the bill before the newly formed Institutional Sustainability and Innovation Committee, where changes might be made to the House version of the bill.
“I think the bigger questions for us are going to be around inclusion of doctors’ practices, nursing homes — there’s a huge issue in nursing homes, but there’s a lot of people in that industry who say they count on private equity to kind of run the business part of it,” he said. “So, there will be interesting discussions ahead of us.”
In previous years, Kearney said opposition from the Hospital and Healthsystem Association of Pennsylvania, or HAP, had made it difficult to pass oversight legislation, especially because older versions also applied oversight requirements for nonprofit hospitals.
“Nonprofits are already subject to the Attorney General’s Review Protocol for fundamental change transactions affecting health care nonprofits, in addition to rigorous federal oversight,” association leaders argued.
This year, Keaney said lawmakers worked closely with the association to craft bill language and amendments, though not all were adopted into the House bill.
HAP President and CEO Nicole Stallings said in a statement that while the association could not support the current version of the bill, “we are committed to remaining engaged in the legislative process and look forward to continued conversations to further refine the language to reflect the complexity of health care transactions while ensuring access to care in communities.”
Specifically, Stallings said the association seeks to clarify exactly which types of health care business transactions are covered under the bill in order to avoid “unintended consequences” in limiting unique and beneficial investments.
“In the midst of considerable financial headwinds and policy uncertainty, Pennsylvania should not become an outlier that discourages routine transactions, joint ventures, and partnerships that aim to add, not detract from, access in communities,” she said.