As California’s 2024 legislative session nears its conclusion on Aug. 31, a bill that would create greater oversight for private equity investments in health care continues to generate concern for hospitals seeking to ensure Californians have access to the services they need.
Regrettably, debate over Assembly Bill 3129 (Wood, D-Healdsburg) is filled with misconceptions and misunderstandings — both about what the bill would actually accomplish and hospitals’ concerns with its most recent version, now in the Senate Appropriations Committee.
CHA’s opposition to the bill centers on several key issues, most importantly that investment in health care services should be encouraged, not restricted, to stabilize the state’s fragile health care delivery system. This bill would create barriers to needed investments when exactly the opposite is needed.
In recent years, several California hospitals have partnered with private entities to create new or expanded patient services. As a result, for example, inpatient rehabilitation hospitals have been built in communities including Sacramento, Irvine, Escondido, and Century City.
These are wins for the people in those communities, and families now have improved access to critical health services closer to home.
Mergers, acquisitions, investments, partnerships, and other types of affiliations are subject to government oversight already in place through comprehensive reviews of such transactions by California’s Office of the Attorney General and the state’s new Office of Health Care Affordability.
Creating additional, convoluted processes for health care entities to secure resources to expand or preserve access to services throughout California would create a deep, chilling effect, driving those finite resources to other states. No one should want to leave California behind when it comes to investing in the health of our state.
The state’s Department of Justice has long had the ability to investigate and prosecute anticompetitive behavior, as do federal government authorities, so Californians are already well-protected.
Recent amendments that broaden the scope of the bill well beyond private equity groups and hedge funds only create more hostile conditions for those considering investing in California’s health care system.
Hospitals stand ready to work with legislators and regulators to improve and modernize existing oversight processes to protect Californians, but AB 3129 is the wrong approach.