Senator Markey, Rep. Jayapal Introduce Health Over Wealth Act, Setting Guardrails for Private Equity in Health Care

Introduction comes as Senate HELP Committee votes to subpoena Steward Health CEO Dr. Ralph de la Torre

Bill Text (PDF) | One Pager

Washington (July 25, 2024) - Senator Edward J. Markey (D-Mass.) chair of the Health, Education, Labor, and Pensions (HELP) Subcommittee on Primary Health and Retirement Security, and Congresswoman Pramila Jayapal (WA-07), member of the House Judiciary Subcommittee on Health, Employment, Labor, and Pensions, today introduced the Health Over Wealth Act, legislation that would require greater transparency for private equity firms and for-profit companies that own health care entities, including hospitals, nursing homes, and mental or behavioral health facilities. The legislation would put safeguards in place to protect workers, patients, and health care quality, access, and safety; create stronger accountability measures for corporate greed; and close tax loopholes that benefit real estate investment trusts making money off of health care property. A discussion draft of the bill was first announced in Boston on April 3 at the HELP Subcommittee on Primary Health and Retirement Security hearing titled, "When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk," chaired by Senator Markey.

"Private equity firms and greedy corporate executives are using the health care system as a piggybank," said Senator Markey. "But putting profit over patients results in substandard care, while health workers suffer, and communities are left to clean up the mess. This is what happened with Steward Health Care in Massachusetts. But the Steward crisis is just one symptom of a larger infection in our health care system that allows corporate wealth to come before the public's health. We need to put in place permanent guardrails to protect patients, providers, and communities, and that is exactly what the Health Over Wealth Act provides. The fight against corporate greed in health care is gaining momentum, and I am thankful to my partners, including Congresswoman Jayapal and my Senate colleagues, for their leadership."

"Private equity firms buying up health care systems are simply bad news for patients, leading to worse health outcomes and higher bills. We have a duty to protect patients from greedy corporations that are prioritizing their bottom line over patient care. I'm proud to be leading the Health Over Wealth Act, legislation that builds on my Healthcare Ownership Transparency Act, with Senator Markey to crackdown on private equity ownership in health care, increase transparency, close loopholes, and ensure that we are always putting patients over profits," said Congresswoman Jayapal.

Since the initial draft, Senator Markey has strengthened protections for patients and workers in the bill by requiring disclosure of agreements with union-busting organizations, strengthened penalties for violations of the Health Over Wealth Act, and included provisions on banning health investors from taking actions that would strip assets from health care entities or otherwise undermine quality, safety, and access to care. With the risk of bankruptcy associated with private equity ownership, the Health Over Wealth Act now includes additional provisions to prioritize workers in bankruptcy payouts and require bankruptcy courts to incorporate impacts on access to health care and health provider employment in its decision making.

A copy of the legislation can be found HERE.

Specifically, the Health Over Wealth Act would:

• Require that private equity-owned health care facilities publicly report on their debt and executive pay, lobbying and political spending, health care costs for patients and insurance plans, and any reductions in services, wages, or benefits
• Require that private equity-owned firms set up escrow accounts to cover five years of expenses to ensure continuation of care in the event of a hospital closure or service reduction
• Authorize the Department of Health and Human Services to revoke investment licenses from private equity firms that price gauge, understaff, or create access barriers to care
• Establish a task force to review the role of private equity and consolidation in health care, including how market trends create or exacerbate health care disparities
• Prohibit private equity firms from stripping assets from health care entities or undermining the quality, safety, or access to health care
• Close tax loopholes for real estate investors in order to disincentivize health care entities from selling their property and then paying exorbitant rents to these investors

The Health Over Wealth Act is cosponsored by Senators Tammy Baldwin (D-Wisc.), Peter Welch (D-Vt.), Jeff Merkley (D-Ore.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Cory Booker (D-N.J.), Tina Smith (D-Minn.), Richard Blumenthal (D-Conn.) and Representatives Becca Balint (VT), Val Hoyle (OR-04), Eleanor Holmes Norton (DC), Mark Pocan (WI-02).

The legislation is endorsed byAmerican Federation of State, County and Municipal Employees (AFSCME), American Federation of Teachers (AFT), Americans for Financial Reform, Committee of Interns and Residents (CIR-SEIU), Community Catalyst, Massachusetts Nurses Association, National Nurses United (NNU), Moral Injury of Healthcare, Private Equity Stakeholder Project, Public Citizen, and United Steelworkers (USW).

"As nurses, we see firsthand how our profit-driven health care system endangers patients and health care workers. Hospital corporations are consistently choosing to cut essential services and understaff our hospitals in order to maximize profit. Health care should not be run like a business; it should be provided as a human right. National Nurses United supports Senator Markey's Health Over Wealth Act to increase transparency and hold private equity and profit-driven health care corporations accountable. Congress can and must take action to rein in for-profit health care corporations from harming the public," said Nancy Hagans, RN, President of National Nurses United.

"For too long, private equity's unchecked acquisition of hospitals, nursing homes and other health care systems has had devastating impacts - compromising the quality of care, limiting access to services, driving up costs and imposing a crushing burden on an already overwhelmed workforce. When private equity firms go bankrupt, the fallout is brutal, with health care workers and our communities bearing the brunt in the form of layoffs, lost pensions and more. Sen. Markey's Health Over Wealth Act takes important steps to solve this crisis, protecting workers by demanding transparency and holding private equity firms accountable. We urge Congress to take immediate action on the bill. It's long past time that we put patient care over corporate profits.

"The Steward hospital crisis is the unfortunate but inevitable consequence of allowing corporate greed to take over our healthcare system. A profit incentive in our hospitals fundamentally corrupts our health care system and harms our patients, our communities, and our health care providers. Currently, private equity is allowed to pillage our health care system, leeching away the resources needed for patient care. We must regulate these bad actors that, ultimately, have no place in the health care system. The Health Over Wealth Act is long overdue," said Dr. Taylor Walker, President, Committee of Interns and Residents/SEIU

"The healthcare workers who carried us through a once-in-a-generation pandemic and know better than anyone how to provide quality patient care have called a code red on private equity firms gutting patient care in favor of their profit. Private equity in our hospitals, which could have resulted in improved patient outcomes, has instead led to everything from staff reductions to department closures, and even refusals to repair surgical equipment. Firms are growing their bank accounts at the expense of our health," said Randi Weingarten, President of American Federation of Teachers. "Sen. Markey's pioneering legislation requires monitoring of how private equity impacts staffing levels, recruitment and retention, patient outcomes, and the number of beds available and protects workers and patients in the event of facility closures. The AFT fully supports Sen. Markey's Health over Wealth Act and encourages the Senate to put patients over profit and pass this bill."

"Too often private equity firms and others chasing profits in the health care industry prioritize short-term financial gain over patient care and community health. Health care workers are forced to do more with less, placing unacceptable strain on the whole system," said Roy Houseman, Legislative Director for the United Steelworkers (USW). "The USW has long advocated for greater transparency and increased accountability when it comes to private equity in health care, and we appreciate Sen. Markey's efforts to find legislative solutions."

"Greed runs rampant in the U.S. health care system and no actors are more unscrupulous and uncaring than private equity companies. The Health Over Wealth Act would bring much needed oversight by enhancing ownership transparency, creating guardrails for companies buying up health assets, and enhancing accountability for bad actors. We can no longer ignore the dangerous role of private equity in health care. This bill would crack down on health care profiteering and is an important step in the right direction," said Eagan Kemp, Health Care Policy Advocate for Public Citizen.

"We have seen the largest concentration of private equity-owned hospitals in states where there is little to no regulation of for-profit hospital ownership. In the worst cases, these PE firms have free reign to use healthcare providers to line their own pockets. Private equity exacerbates the kinds of extractive tendencies that for-profit healthcare systems frequently exhibit, and private equity firms frankly get away with their schemes because complex corporate structures shield firms from transparency and accountability. On top of these private equity-specific issues, current regulatory loopholes, combined with poor or nonexistent enforcement of existing regulations, have enhanced profiteering opportunities for these private equity firms.

"It's therefore critical for policymakers to pass legislation, and for regulators to propose rules that increase transparency and accountability for private equity investments in healthcare. The new Health over Wealth Act is going to provide a much more expansive toolbox to be able to identify and regulate private equity actors in the health industry. This is a great step toward mitigating the destruction wrought by private equity in healthcare. We must be serious about the real and everyday impacts of private equity healthcare profiteering and give stakeholders the means to hold Wall Street accountable," said Chris Noble, Policy Director at Private Equity Stakeholder Project.

Senator Markey has consistently advocated for transparency and accountability for private equity in health care amidst the Steward hospital crisis.

At a Boston field hearing he chaired in April, Senator Markey released his new legislative agenda calling for transparency and accountability for private equity in health care; protecting patients, providers, and workers; and guaranteeing health care for all. As part of his legislative agenda, Senator Markey released a discussion draft of his Health Over Wealth Act. Despite numerous invitations from Senator Markey, including a joint invitation from Senators Markey and Warren, to testify at the hearing, Dr. de la Torre refused.

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