A group of Democrats introduced bicameral legislation Wednesday to ban private equity from owning medical practices, citing concerns that corporate ownership is driving up health care costs. The bill was introduced by Sen. Elizabeth Warren (D-Massachusetts) with support from 12 other members of the Senate and House.
The legislation is modeled after an Oregon law that took effect this year and has already been used successfully by physicians in Eugene to prevent a corporate takeover. Warren’s bill would prohibit for-profit corporations, including private equity funds and insurance companies, from owning medical practices. It would also ban management services organizations—entities that conduct business operations for practices—from controlling medical offices.
Proponents argue the measure could help address rising health care costs. According to the Kaiser Family Foundation, between 2000 and 2004, medical care costs increased by 121 percent compared to 86 percent for the broader consumer price index. Private equity investment in health care has accelerated dramatically: from $5 billion in 2000 to $104 billion in 2024.
Research cited in the bill’s framing indicates that private equity ownership is associated with worse patient outcomes and higher costs, particularly in nursing homes. According to Warren, “Patients want to know that decisions about their health are being made by their doctors, not by Wall Street investors.”
The bill addresses a significant shift in physician employment. As of this year, 82 percent of physicians are employed by hospitals or other corporate entities, up from 62 percent in 2019—a 20-point increase. The legislation aims to allow physicians to retain control of their practices and medical decision-making.
The bill includes enforcement mechanisms, according to Marco Fernandez, president of the Association for Independent Medicine. It provides three enforcement paths: the Federal Trade Commission, state attorneys general suing on behalf of residents, and physicians themselves through a private right of action with treble damages. The legislation also mandates divestment for non-compliant entities.
Health and advocacy groups have backed the measure. Rising health care costs are expected to continue: a recent survey found employers expect health care plan costs to rise by an average of 11 percent per worker in 2027, unless benefits are cut.
Key facts
- The bill would ban for-profit corporations and management services organizations from owning or controlling medical practices
- Private equity health care investment increased from $5 billion in 2000 to $104 billion in 2024
- 82 percent of physicians are now employed by hospitals or corporate entities, up from 62 percent in 2019
- The bill is modeled after Oregon legislation that took effect this year
- Enforcement includes FTC action, state attorney general lawsuits, and a private right of action for physicians