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Private equity crackdown may be slow in coming

Sen. Ed Markey

Ed Markey. Photo: Alex Wong/Getty Images

Sen. Ed Markey is pushing an ambitious effort to crack down on private equity ownership in health care. But it faces a long and difficult road to passage.

Why it matters: Markey's effort comes amid several congressional inquiries into whether private equity ownership, and firms' profit motives, compromise patient care. But the way the bill would create federal powers to halt deals is controversial.

Between the lines: Markey's effort is still in the early stages, and he says he is gathering feedback on a discussion draft of the measure.

  • It includes a slew of new transparency requirements for health care entities owned by private equity.
  • Notably, it also would require private equity firms to get a license before investing in health care entities, giving HHS significant power to stop transactions from happening.

Reality check: Although it's still early, that kind of major new federal government power over business transactions is likely to raise red flags for Republicans.

  • The office of Senate HELP Committee Ranking Member Bill Cassidy said it's reviewing Markey's legislation but declined to comment on it.
  • Markey's bill draws in part from a House measure from Rep. Pramila Jayapal, the Healthcare Ownership Transparency Act, which does not have any Republican cosponsors.
  • A spokesperson for Senate HELP Chair Bernie Sanders didn't respond when asked whether Sanders has a position on the bill or if the committee plans hearings or a markup.

The private equity industry is expected to vigorously fight back. The American Investment Council told Axios' Dan Primack last week that "headline-seeking politicians continue to place misguided blame on our industry instead of pursuing sound policymaking to address systemic challenges head-on."

Yes, but: There is some Republican interest in the issue, mainly around the investigations.

  • Sen. Mike Braun and Rep. Don Bacon joined Markey last month in investigating the role of private equity in potentially limiting access to methadone in opioid treatment programs.
  • Sen. Chuck Grassley, the ranking member of the Senate Budget Committee, joined Chair Sheldon Whitehouse in December in investigating the role of private equity ownership of hospitals.
  • Senate Homeland Security Committee Chair Gary Peters is also investigating the role of private equity ownership in emergency room care, though no Republican is on board right now.

What's next: Markey says he is still gathering input on the discussion draft, which grew out of the private equity–linked financial crisis of Steward Health Care hospitals in Massachusetts.

  • "My Health over Wealth Act would establish guardrails that stop corporate greed from affecting access to care by protecting patients and providers and creating transparency and accountability," Markey said in a statement to Axios.
  • "I look forward to incorporating public input into the discussion draft of the bill."
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