ABSTRACT
Private equity (PE) has played a large and growing role in shaping the American health care landscape. Over the past decade alone, PE investments have approached $1 trillion, with private capital targeting nursing homes, long-term care facilities, hospitals, general physician groups, and specialty clinics. As PE activity has expanded, so, too, has a body of literature questioning its implications for the cost, quality, accessibility, and equity of care. Despite mounting evidence of harm, antitrust authorities have struggled to keep pace. Today, however, there is growing political will for reform, driven by regulators who have recognized that PE’s outsized footprint makes it an urgent target for policy intervention. This article outlines the essential role of regulatory initiatives in shaping a more responsible future for PE in health care. We contend that robust policy must, at a minimum, shield patients, providers, and practices from PE’s associated risks, and, at best, position these parties to benefit from private investment. Accordingly, this manuscript emphasizes how state and federal regulators can usher in a new era of health care PE. Most fundamentally, this involves empowering antitrust authorities and strengthening existing policies to increase accountability, promote competition, and curb consolidation. In parallel, we encourage policy makers to pursue innovative regulatory solutions, including health care–specific PE law, alignment of state and federal oversight, adoption of alternative payment models, and strengthened patient protections against PE-associated clinical and nonclinical risks. Lastly, we underscore the importance of learning from international policy makers who have embraced comprehensive health care PE oversight.
Am J Manag Care. 2026;32(5):In Press
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Takeaway Points
As private equity (PE) proliferates across the American health care landscape, state and federal regulators must advance policy solutions that minimize the field’s associated harms while capturing potential benefits from private capital infusions. Accordingly, we recommend the following:
- Empower antitrust authorities and strengthen existing policies to increase accountability, promote competition, and curb consolidation.
- Pursue novel regulatory solutions, including health care–specific PE law, alignment of state and federal oversight, adoption of alternative payment models, and strengthened patient protections against PE-associated risks.
- Learn from international policy makers who have embraced PE oversight through models that enhance transparency and regulate financial arrangements.
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Private equity (PE) has played a large and growing role in shaping the American health care landscape. In recent years, PE investments have proliferated across various clinical environments.1 PE has also expanded globally: Between 2018 and 2022, global health care investments reached $446 billion, and in 2024 alone, global health care deal values were estimated at $115 billion.2,3 Still, health care PE disproportionately impacts the US, with investments approximating $1 trillion over the past decade.4 Commensurate with PE’s rising influence are regulatory concerns about its implications for the cost, quality, accessibility, and equity of health care. Within the US, state and federal agencies are working to address these challenges. PE’s outsized footprint makes it an ideal target for policy intervention. This article outlines the salience of regulatory initiatives and the roles of nascent and established policies in shaping a responsible future for health care PE.
PE entered the US health care sector in the 1990s. Investments have since risen precipitously, particularly following the passage of the Affordable Care Act (ACA). This growth has been sustained by fee-for-service (FFS) reimbursement schemes, service fragmentation, an inadequate regulatory environment, and market arrangements incentivizing innovation.5 Currently, PE deals number in the hundreds each year.6 Policy makers have struggled to keep pace. As a result, PE activity remains subject to limited regulatory oversight.7 A large body of literature associates PE acquisitions with increased costs to payers or patients, mixed or decreased quality, reduced staffing, a focus on profitable service lines, and lower patient satisfaction metrics.6,8 Given these findings, there is a clear need for more robust policy. Before advancing novel policy prescriptions, however, we must examine existing regulatory initiatives.
The regulation of health care PE has historically rested on reporting requirements. The Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 serves as a prime example, mandating that acquisitions exceeding $133.9 million be reported to federal antitrust authorities.9 In principle, the HSR Act is designed to bolster transparency. In practice, the act has not effectively countered PE’s opaque ownership structures. For example, in 2022, when the HSR reporting threshold stood at $101 million, more than 90% of PE investments went unreported.10,11 To address this inadequacy, at least 15 states have amended the HSR Act, establishing “mini HSR” laws to better track PE investments.12 New York’s Article 45-A and Oregon’s House Bill 4130 exemplify a trend toward expanded state-level regulatory oversight.13,14
Alongside structural reforms, policy makers have historically sought to regulate PE-associated market behaviors. As of early 2026, at least 79 bills addressing PE transactions and investor-backed ownership in health care were documented across 25 states.15 Increased attention has also been directed toward curbing anticompetitive practices. Although federal antitrust authorities have voiced concern about PE’s influence, their enforcement actions have been limited. Two notable exceptions came in 2023: First, when the Federal Trade Commission (FTC) spearheaded a landmark lawsuit accusing PE firm Welsh Carson of antitrust violations, and second, when the Promoting Access to Treatments and Increasing Extremely Needed Transparency Act was introduced in Congress.16 More stringent market oversight has occurred at the state level, as attorneys general in California and Colorado have targeted anticompetitive practices.17 State and federal regulators have also prioritized care quality, seeking to hold PE-backed facilities accountable for patient health outcomes via the Corporate Crimes Against Health Care Act and the Health Over Wealth Act.18
As discussed earlier, established policies primarily attempt to regulate health care PE by increasing transparency, accountability, and competition.16 Although these efforts represent important steps toward oversight, empirical evidence on their effectiveness remains limited; where data exist, findings are mixed.8,11 While researchers should continue to critically evaluate these policies, a forward-looking agenda is equally necessary. Established regulatory frameworks and heightened political will for reform offer strong foundations upon which state and federal regulators should build.15
Effective oversight must acknowledge that PE influences health care along 2 dimensions: (1) through its financial model and (2) through the clinical and operational behaviors that model drives. Future regulations that address both domains will be best equipped to protect patients, providers, payers, and practices from PE’s risks and harms while more productively steering infusions of private capital.8,19 Building on this premise, the remainder of this article proposes innovative policy solutions.
Federal Policy Levers
At present, health care priorities—such as health outcomes, patient experience, and cost of care—are not inherently addressed by traditional antitrust law, which guards against broad anticompetitive conduct. If antitrust law is to serve as federal regulators’ primary tool in managing health care PE, policies must be reimagined to serve a health care–specific audience.16 Beyond antitrust law, federal reforms can be achieved through strengthened FTC oversight, stricter regulation of market prices, enforcement of surprise billing laws, closure of the carried interest loophole, and rigorous efforts to curb moral hazard associated with high-risk corporate practices.7,10 Regulators should also consider redefining merger and acquisition review criteria to reflect cost, quality, and access indicators. As a complement, policy should be introduced to enable the evaluation of rollups, encourage longitudinal posttransaction monitoring, and limit debt financing of acquisitions.17,20 Together, these proposals might help close loopholes that currently allow firms to circumvent reporting requirements.
To counter PE-associated infringements on physician autonomy, clinical decision-making, and job security, Congress should consider revising ACA Section 6001. Upon its enactment, this provision significantly restricted the expansion of existing physician-owned hospitals (POHs) and the establishment of new ones. Enabling POHs might safeguard physician autonomy, promote competition, catalyze innovation, and reverse consolidation.21,22
Federal regulators should accelerate the transition away from FFS billing and toward alternative payment models. Unlike FFS, which PE firms can exploit to maximize profits by constraining resource use, arrangements such as capitation or bundled payments shift some financial risk toward providers, disincentivizing upcoding, overutilization, and potential fraud. Through their design, these arrangements might also hold providers and investors accountable for health outcomes, patient experience, and health equity.20,23
Likewise, policies (including Medicare reimbursement incentives) should be put in place to intentionally guide PE capital toward long-term investments in high-need areas.24 These policies would serve as a counterweight to PE’s focus on short-term profits and consequent rapid expansion into high-margin specialties.4 Encouraging investment in sectors with less immediate financial return may stimulate innovation and help address care gaps.
State Policy Levers
At the state level, promising examples of reform-oriented policies include those that endorse provider independence, often by leveraging corporate practice of medicine laws, which prohibit PE firms (among other nonclinician entities) from engaging in medical decision-making or employing physicians.25 Enhanced physician autonomy might serve as a bulwark against growing trends of commercialization. State policy makers should also augment mini HSR laws, lowering reporting thresholds and strengthening enforcement mechanisms to promote transparent business practices.12 In addition to more comprehensive reporting requirements, state regulators should consider directly limiting PE-backed transactions, proactively restricting PE expansion rather than retroactively monitoring corporate actions.13,14
Aligning Federal and State Levers
Some policy initiatives must be tailored to local contexts, but others are more universal. Wherever possible, policy makers should align state and federal regulations. In practice, this means focusing on consensus issues. For example, both state and federal regulators have an interest in strengthening patient protections against PE’s documented risks; this might involve aligning oversight standards between CMS and state-level payer programs.8 Another priority might be building a federal-state registry intended to track PE activities (including mergers, acquisitions, transactions, and performance measures) for use by researchers and regulators. Policy makers should also entertain universal minimum reporting thresholds, coordinated antitrust enforcement, and standardized disclosure requirements.7 Jointly, state and federal regulators are uniquely poised to reform the health care PE marketplace.
Global Insights
Although particularly influential in the US, PE operates globally. Thus, US regulators should draw lessons from international counterparts. Key insights should be gleaned from the European Union’s expansion of PE disclosure requirements, strengthening of data privacy regulations, monitoring of anticompetitive conduct, and simplification of corporate reporting practices.26,27 Policy interventions across non-US high-income countries generally focus on enhancing transparency and regulating financial arrangements.28 The US should, in turn, explore streamlining merger and acquisition regulations and implementing consistent reporting thresholds.29 Indeed, US efforts to develop a more cohesive regulatory environment should draw from unified global policies.
As broader trends of health care consolidation and financialization persist, it becomes increasingly important to have a countervailing force. We contend this force should take the form of well-designed, pragmatically implemented state and federal policies targeting health care PE. Although the number of policy proposals continues to rise, few have been implemented, and fewer still have been evaluated. We encourage policy makers to rigorously design, implement, and evaluate innovative health care PE–focused policies, including those that build on and diverge from precedent. Well-regulated PE is a prerequisite to thriving, equitable health care systems and can help facilitate a successful return to patient-centered care.
Author Affiliations: Washington University in St. Louis (MEB, KT), St Louis, MO; Harvard Medical School (FOR, HK-E, MLW), Boston, MA.
Source of Funding: None.
Author Disclosures: Mr Berman was an employee of Aledade Inc until September 2024 and holds Aledade shares. The remaining authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.
Authorship Information: Concept and design (MEB, KT, FOR, MLW); analysis and interpretation of data (KT); drafting of the manuscript (MEB, KT, FOR, MLW); critical revision of the manuscript for important intellectual content (MEB, FOR, HK-E, MLW); administrative, technical, or logistic support (MEB, KT, HK-E); and supervision (MEB, HK-E).
Address Correspondence to: Mary L. Witkowski, MD, MBA, Harvard Medical School, 25 Shattuck St, Boston, MA 02115. Email: mary_witkowski@hms.harvard.edu.
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