Gov of Pennsylvania, Josh Shapiro, is taking a hard stance against private equity’s growing presence in health care, calling for increased transparency and oversight.
He argues that reform is needed to curb the influence of investment firms that prioritize profits over patient care.
During his recent budget address, the Gov. Shapiro didn’t hold back, accusing private equity firms of exploiting the system—buying up hospitals and practices, stripping resources, and sometimes abandoning communities when the money runs dry.
A recent watchdog report identified nearly 900 healthcare facilities in Greater Philadelphia backed by private equity firms.
These investments span physical therapy, gastroenterology, dental medicine, cardiology, and behavioral health.
While proponents argue that private equity can bring financial stability and efficiency, critics warn that the drive for profit often leads to higher costs for patients and reduced quality of care.
Take the case of More Than Movement in Northern Liberties.
This independently owned physical therapy and fitness hybrid has thrived outside the traditional insurance-based model, allowing its owner to sidestep the financial pressures that drive many practices into the hands of private equity firms.
But for those struggling with slim margins and burdensome administrative costs, selling to a Philadelphia private equity-backed firm can seem like a lifeline.
The problem, as experts note, is that private equity investments in health care often lack transparency.
Unlike publicly traded companies, these firms aren’t required to disclose financial reports, leaving patients and regulators in the dark about how decisions are made.
Critics say this lack of oversight enables price hikes, cost-cutting measures that impact care quality, and, in some cases, abrupt closures.
Josh Shapiro’s push for reform comes amid high-profile cases of hospital closures linked to private equity ownership.
His proposed legislation would impose stricter disclosure requirements and oversight mechanisms to ensure that financial incentives don’t come at the expense of public health.
The battle over private equity in health care is just beginning in Pennsylvania. With billions in investments and an entrenched presence across multiple medical specialties, these firms won’t go quietly.
But with the governor bringing the issue to the forefront, lawmakers will have to decide: Should profit-driven investors shape the future of health care, or should the state protect patients and providers?
