Joint Finance Committee Testimony in Support of Health Care Entity Oversight and Transparency (25-1647)

The Private Equity Stakeholder Project (PESP) urges the Wisconsin Joint Finance Committee to adopt bill 25-1647, which would grant the Department of Health Services (DHS) power to review and approve material transactions in the health sector. PESP argues that private equity's debt-heavy business model—characterized by leveraged buyouts, sale-leasebacks, and dividend recapitalizations—leads to higher costs, reduced staffing, and increased bankruptcy risks for healthcare providers. The testimony highlights that in 2024, 21% of healthcare bankruptcies involved private equity-owned companies, and 88% of the largest bankruptcies (liabilities over $500 million) had a history of private equity ownership. PESP supports the bill's expansive definition of 'material change transactions' to include joint ventures and sale-leasebacks, aiming to prevent the 'looting' of safety net hospitals and protect patient care quality.

• Bill 25-1647 is supported for its ability to provide the Department of Health Services (DHS) with the authority to approve, conditionally approve, or disapprove material change transactions to prevent anticompetitive impacts, increased costs, and the reduction of healthcare services.
• A significant strength of bill 25-1647 is its broad definition of 'material change transactions,' which encompasses not only standard mergers and acquisitions but also joint venture arrangements and the sale-leaseback of healthcare real estate to real estate investment trusts (REITs).
• Private equity investment in the US healthcare sector has exceeded $1 trillion over the last decade, impacting diverse areas including hospitals, emergency medicine, dentistry, and behavioral health.
• Research indicates that private equity ownership of healthcare facilities is linked to negative outcomes, including a 25.4% increase in hospital-acquired conditions (such as bloodstream infections and falls), reduced nurse staffing levels, and higher costs in nursing homes.
• Private equity firms utilize specific financial tactics that can drain resources from healthcare operations, including high leverage (leveraged buyouts), sale-leasebacks of real estate, debt-funded dividends (dividend recapitalizations), 'roll-ups' of multiple companies, and the charging of management or advisory fees.
• Private equity ownership is strongly correlated with healthcare bankruptcies; in 2024, 21% of all healthcare bankruptcies involved private equity-owned firms, and 88% of the largest bankruptcies (those with liabilities exceeding $500 million) involved companies with a history of private equity ownership.
• Private equity firms often use joint ventures with nonprofit health systems to expand into new geographic markets and potentially evade antitrust scrutiny that would apply to traditional mergers.

APA

Private Equity Stakeholder Project (2025). Joint Finance Committee Testimony in Support of Health Care Entity Oversight and Transparency (25-1647). https://pestakeholder.org/wp-content/uploads/2025/06/4-28-25-WI-Budget-Testimony-Health-Care-Entity-Oversight-and-Transparency-PESP.pdf

Chicago

Private Equity Stakeholder Project. Joint Finance Committee Testimony in Support of Health Care Entity Oversight and Transparency (25-1647). 2025. https://pestakeholder.org/wp-content/uploads/2025/06/4-28-25-WI-Budget-Testimony-Health-Care-Entity-Oversight-and-Transparency-PESP.pdf.

Wikipedia

{{cite press release |author=Private Equity Stakeholder Project |title=Joint Finance Committee Testimony in Support of Health Care Entity Oversight and Transparency (25-1647) |date=28 April 2025 |url=https://pestakeholder.org/wp-content/uploads/2025/06/4-28-25-WI-Budget-Testimony-Health-Care-Entity-Oversight-and-Transparency-PESP.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{privateequitystakeholderproject2025joint, author = {{Private Equity Stakeholder Project}}, title = {{Joint Finance Committee Testimony in Support of Health Care Entity Oversight and Transparency (25-1647)}}, publisher = {Private Equity Stakeholder Project}, year = {2025}, month = apr, url = {https://pestakeholder.org/wp-content/uploads/2025/06/4-28-25-WI-Budget-Testimony-Health-Care-Entity-Oversight-and-Transparency-PESP.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }