The California Capitol. Photo: David Paul Morris/Bloomberg via Getty Images
California lawmakers could pass legislation this week that would allow the state to block private-equity acquisitions of health care facilities or providers.
Why it matters: It's the latest example of states trying to regulate deals valued at $1 trillion over the past decade that critics have linked to staffing shortages and poorer patient outcomes.
State of play: The legislation builds on an existing state requirement that firms buying health care businesses notify the California attorney general before the transaction is finalized.
Explicit approval of the state would be required for a private-equity firm or hedge fund to officially acquire most types of health care organizations with gross annual revenue of $25 million or more.
Investors would also be banned from interfering in medical decision making.
Yes, but: Deals involving for-profit hospitals would be exempt from the law in the most recent version of the bill. The change followed pressure from both health care providers and investor groups, CalMatters reported.
Zoom in: The California Health Care Foundation identified 22 hospitals currently owned by private-equity firms, including two in San Diego County.
