America’s healthcare infrastructure is being put to the test. Too many underserved communities across the country continue to face barriers to accessing quality care, and rural communities are having to grapple with a devastating rise in hospital closures. Nearly 200 rural hospitals have closed in the past two decades, and hundreds more are at risk of shutting down in the coming years. Every American, regardless of zip code, deserves access to the healthcare services that they and their families need. However, without adequate investment, this vision could slip further out of reach.
Private capital investment in our healthcare system has the potential to step up and turn the tide on these worrying trends; however, it too is being put to the test. Recent examples of bad actors putting profits over patients have understandably tainted public perceptions around the role of private investment in healthcare, and lawmakers are responding with heightened scrutiny – state legislative sessions this year saw numerous pieces of legislation aimed at restricting private healthcare investment. While some bills succeeded and others failed, the uptick in legislative activity is sending a clear message: this issue isn’t going away anytime soon in state capitals across the country.
The outcomes in Oregon and Maine this spring are a clear warning sign. In Oregon, the governor recently signed the most comprehensive and restrictive set of rules in the country into law. Similarly, Maine recently acted quickly to impose restrictive measures targeted at private capital investment in healthcare. In just a matter of days, the state legislature passed and enacted LD 985 as an emergency piece of legislation, placing a moratorium on ownership changes of hospitals and banning private capital and REITs from these investments. With many hospitals in the state facing financial struggles, this ban could further impact communities whose local hospitals may be facing closure as a result of mounting regulatory and financial pressure.
Perception is everything, and right now, sweeping generalizations and misconceptions about the influence of private investment in our healthcare system are driving the public discourse around who should be allowed to invest in our healthcare system. Decisions based on these perceptions could have negative unintended consequences for patients across the country, regardless of the good intent of lawmakers trying to grapple with important and grave concerns. Unless responsible investors tackle this perception issue head-on and evolve to meet the current moment, the drastic actions taken in Maine and Oregon could soon be emulated in states across the country and lead to a patchwork of harmful restrictions that limit and undermine needed investment in critical healthcare infrastructure.
Instead, a more balanced approach is necessary to prevent tragedies from the outset without stifling the infusion of private investment that can rescue systems on the verge of failing. To achieve this, responsible investors need to actively showcase to the public and to policymakers the many benefits they bring in terms of innovation, streamlined administrative processes, and increased access to care.
To be clear, we cannot and must not ignore the failures caused by bad actors and blatant cases of mismanagement. However, these examples should not overshadow the many success stories that responsible private investment can boast. For example, private investment has proven critical in helping urgent care facilities expand their reach with new facilities across the country, providing rural and underserved areas with services like digital X-rays, lab testing, and more. Private investment in women’s healthcare has created access to critical treatment options that change lives. These are also the stories of private investment and should be part of the public conversation.
The industry must also come together to show that it stands for something, and that it is guided by principles which prioritize the interests of patients, providers, and communities. The organization I lead, the Association for Responsible Healthcare Investment, was created to do just that – present a clear vision for what ethical practices look like and provide a unified voice for the responsible investors that remain a force for good in healthcare.
Now is the time for ethical investors to proactively demonstrate how responsible investment supports patients and make it clear to policymakers the value that good actors bring to the table in strengthening our healthcare infrastructure. The industry must take a stand and declare that the days of putting profits over patients are over and that today’s investments place a premium on patient outcomes and long-term value creation. In doing so, we can kickstart a more productive conversation and build a better future for patients in every corner of our nation.
Regan Parker serves as CEO of the Association for Responsible Healthcare Investment, a new coalition dedicated to promoting responsible private investment in healthcare and strengthening the healthcare system for patients, communities, and providers.
