From technology to real estate, financial services, and retail, the influence of private equity in our economy has become a political flashpoint in recent years. Today, that debate is heating up when it comes to healthcare, with a wave of state and federal proposals aimed at limiting private investment in hospitals and healthcare facilities. But cutting off capital to already struggling facilities won’t fix the system—it risks accelerating closures, reducing access, and leaving patients with fewer quality care options.
In Congress, that momentum is now taking shape in the recently introduced “Take Back Our Hospitals Act,” legislation from Senator Chris Murphy (D-CT), that would effectively bar hospitals and nursing homes backed by private equity from receiving Medicare funding. Supporters argue the bill is necessary to curb abuse and protect patients, pointing to high-profile examples of mismanagement that led to bankruptcy and closures. These examples of severe mismanagement, led by a few bad actors, deserve accountability. But a sweeping federal ban risks doing more harm than good.
Even the legislation’s most-cited example—Steward Health Care—is more complicated than most media like to portray. While a private equity firm initially acquired Steward, the financial structure that ultimately drove its collapse was a separate sale-leaseback agreement. By the time Steward filed for bankruptcy in 2024, that private equity firm had exited years earlier. Steward’s failure was not tied solely to ownership but reflected the underlying challenging financial structure and broader issues across the system. To be clear, the outcome of the Steward Health crisis and the impact on the patients, healthcare professionals, and communities it affected is devastating. And ensuring that we don’t continue to see hospital closures and reduced access to care should be everyone’s focus.
The misguided sole focus on ownership models is evident in how this legislation seeks to use Medicare funding as a punitive tool, especially at a time when healthcare funding has already been cut in a wide range of areas. This bill assumes that private equity ownership inherently leads to worse outcomes and higher costs, but the evidence does not support that sweeping conclusion. A recent Government Accountability Office report found no evidence of increased spending following private equity acquisition and little indication of reduced quality or access to care.
In some cases, the opposite was true: private investment has helped practices modernize operations, foster innovation, and expand access to more advanced treatments. For example, private equity helped a small urology practice acquire costly medical equipment that supports less invasive procedures, while also helping expand access to critical services, such as fertility care, in low-income and rural communities where options would otherwise be limited.
An outsized focus on specific ownership models also ignores the fact that private equity-backed practices represent a relatively small share of the healthcare system, with just 6.5 percent of physicians working in these models. Moreover, private ownership is concentrated in a few distinct specialties, such as dermatology and gastroenterology, many of which operate outside of traditional hospital settings. Even in nursing homes, the other main target of this legislation, private equity owns roughly 5% of facilities, meaning the vast majority of providers would see no difference if this proposal were implemented.
These findings show that threatening Medicare eligibility to prevent private investors from providing capital to stabilize struggling facilities is not targeted reform and lacks clear evidence to support it. If the goal is to improve patient outcomes and control costs, legislation that would limit the number of providers available to serve Medicare patients is not the right solution.
When it comes to healthcare, the priority should be supporting patients’ access to timely, high-quality care and ensuring clinicians have the resources and confidence they need to make medical decisions free from financial interference. That is where policymakers should focus their efforts. Rather than singling out ownership models, lawmakers should prioritize consistent oversight that holds all providers to the same expectations, private equity, public, and non-profit alike.
Lawmakers in Senator Murphy’s home state have already spearheaded legislation that reflects a more balanced approach. Connecticut’s Senate Bill 196 would help ensure transparency and accountability by strengthening reporting and oversight requirements for all hospitals, regardless of ownership. It also provides targeted support to facilities experiencing financial distress, helping ensure that they can continue operating and serving patients in need. This approach protects the capital that healthcare entities rely on while reinforcing the standards necessary to safeguard patient care—without resorting to sweeping bans that risk cutting off patient access. Accountability—not ownership labels—is how we ensure that patients receive the care they deserve.
At a time when the nation’s healthcare system is already under strain, policymakers should be working to expand access to care—not restrict the resources that help sustain it. A thoughtful approach that enforces accountability and transparency without limiting innovation and access is where lawmakers should focus their efforts. Senator Murphy’s legislation risks undermining the goal of expanding access to innovative care by limiting investment without addressing the problems hospitals and their providers face.
If lawmakers get this wrong, the consequences won’t just be felt at the federal level; they will ripple through communities across the country that can least afford to lose access to care.
Regan Parker is the CEO of the Association for Responsible Healthcare Investment (ARHI).
