Some private investors gravitate toward purchasing hospitals and physician practices, and state lawmakers have taken notice.

The problem, some lawmakers say, is that private investors push for short-term profits, which can lead to lower quality of care at higher prices.

Also, the ownership stake of private equity in a hospital and physician practices can be difficult to determine, leaving lawmakers in the dark as to who’s profiting from a large chunk of their state’s expenditures.

“Private equity has figured out there’s a lot of money in health care,” said Julie McGuire, a Republican state representative in Indiana.

She said Indiana will devote one-fifth of its 2025 spending to Medicaid payments alone.

“That’s 20 percent of our tax dollars, and we have no idea who’s getting it,” she told The Epoch Times.

Across the United States, about 488 hospitals are now owned by private equity, according to watchdog group Private Equity Stakeholder Project. That’s about 1 of every 12 private hospitals.

Yet there are indications that prices go up and quality goes down after private equity moves in.

“Early evidence showed that private equity acquisition was associated with increased charges, reduced staffing, use of profitable service lines, a decreased proportion of patients with Medicare, and increased net income,” the authors said.

The authors, however, also noted that “not all [private equity] activity in healthcare is a simple ‘good’ or ‘bad.’”

“[Private equity] firms are widely recognized as agents capable of removing inefficiencies in markets and optimizing company operational performance at a rapid pace, strengths the modern-day healthcare system sorely needs,” the report said.

Lawmakers are not uniformly opposed to private equity ownership of hospitals. But some report frustration with the complex corporate arrangements that sometimes obscure ownership. They want more information to determine what, if any, action may be needed.

A hospital in Irvine, Calif., on July 8, 2025. As private investors buy hospitals and physician practices, lawmakers say ownership transparency is crucial, citing reports that show prices rise and quality declines after private equity takeovers. John Fredricks/The Epoch Times

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“The idea with [our bill] was to gather information in a reliable way to even know what we’re dealing with,” Ashley Troy, chief of staff for Texas state Rep. Jay Dean, a Republican, told The Epoch Times.

“Unfortunately, we ran out of time in trying to do it well,” Troy said. “We decided to study it a little bit more in the interim, before our next legislative session.”

To deal with reluctant reporters, the legislature expanded the power of the attorney general to investigate market concentration in health care.

“With the passage of this bill, every Oregonian will know that decisions in exam rooms are being made by doctors, not corporate executives,” state House Majority Leader Ben Bowman, a Democrat, said in a May 28 statement.

Some states have gone beyond reporting requirements.

The law also prohibits the licensing of hospitals whose primary acute care facility is on land owned by a real estate investment trust.

Steward had been bought and later sold by a private equity firm that sold some hospital property to a real estate investment trust.

Massachusetts Gov. Maura Healey said, “[The law will] close loopholes in our regulatory processes so that for-profit providers like Steward Health Care are subject to the same transparency rules as non-profit providers.”

Massachusetts Gov. Maura Healey attends an event in Boston on June 17, 2025. Healey signed a law in January expanding reporting requirements for health care ownership transactions to include private equity. Learner Liu/The Epoch Times

California Gov. Gavin Newsom vetoed a 2024 bill that would have required private equity firms to get written consent from the state’s attorney general 90 days before buying or selling a health care facility or provider group.

The governor said a review of such transactions was already provided by the Office of Health Care Affordability, created in 2022.

“There was an interest in the concepts of my bill by the attorney general,” Illinois state Sen. Graciela Guzmán, a Democrat and sponsor of the bill, told The Epoch Times.

“From what I understand, they’re looking, in conjunction with other agencies, at other action that may include some of these principles,” she said.

Guzmán said Illinois lawmakers may need more time to explore the issue.

Health care workers near the ambulance area of a hospital in Orange, Calif., on Aug. 9, 2021. California Gov. Gavin Newsom vetoed a 2024 bill that would have required private equity firms to obtain approval from the state attorney general before buying or selling health care facilities, saying such reviews are already covered under the current system. John Fredricks/The Epoch Times

Guzmán introduced her Illinois bill after attending a conference with other state legislators who had been dealing with problems arising from private investment in health care.

“I filed the legislation seeking my Assembly to be proactive about the matter, so that we don’t see further consolidation and anti-competitive behavior … that we’re seeing in other places,” Guzmán said.

She listed higher prices, lack of access to care, and worse health outcomes as common ills resulting from profit-driven ownership of health entities.

Legislative action will take time. The Texas legislature will not be back in regular session until January 2027.

Indiana will not have its first full year of ownership reports before November 2026.

Until then, McGuire is motivated to ensure access to quality and affordable health care for Hoosiers.

“Indiana lost 14 labor and delivery units in the last five years,” McGuire said, noting that profit-driven ownership often brings consolidation, forcing patients to travel further for care.

“Rural communities suffer most,” she said.