Testimony in Support of S. 868  Private Equity Stakeholder Project

The Private Equity Stakeholder Project (PESP) supports Massachusetts Senate Bill 868, which aims to prevent healthcare provider financial distress by prohibiting excessive leverage, debt-funded dividends, and certain real estate transactions. PESP argues that private equity ownership in the US healthcare sector has led to increased consolidation, service cuts, and high bankruptcy rates, citing the 2024 bankruptcy of Steward Health Care as a primary example of the risks posed to Massachusetts patients and workers.

• Private equity has significantly increased its presence in the US healthcare sector, investing over $1 trillion over the last decade and reaching a peak of 515 buyouts valued at $151 billion in 2021. This growth has driven horizontal consolidation across various specialties, including primary care, emergency medicine, eye care, gastroenterology, durable medical equipment, anesthesiology, dental care, fertility clinics, methadone treatment centers, and air ambulances.
• Private equity ownership is linked to high rates of healthcare bankruptcy. In 2024, 21% of healthcare bankruptcies involved private equity-owned companies, and 88% of the largest bankruptcies (those with liabilities exceeding $500 million) occurred at companies with a history of private equity ownership.
• Massachusetts has faced specific negative impacts from private equity in healthcare, most notably the 2024 bankruptcy of Steward Health Care (previously owned by Cerberus Capital Management). Steward reported over $9 billion in liabilities, including $6.6 billion in rent obligations to Medical Properties Trust, $1 billion in unpaid vendor bills, and $290 million in unpaid employee wages. In the six years prior to bankruptcy, Steward closed six US hospitals, resulting in at least 2,650 layoffs and cuts to cancer care, behavioral health, and obstetrics.
• Other private equity-related issues in Massachusetts include the 2021 bankruptcy of Community Intervention Services (owned by H.I.G. Capital) following allegations of fraudulent Medicaid billing at South Bay Mental Health Center, and a 2021 lawsuit against Aspen Dental Management for deceptive 'bait and switch' advertising.
• Senate Bill 868 is intended to create financial guardrails for healthcare providers by prohibiting debt-funded dividends, excessive leverage, management fees, and real estate transactions that could lead to financial distress.

APA

Private Equity Stakeholder Project (2025). Testimony in Support of S. 868  Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2025/08/7-25-25-MA-S.-868-Tesimony-PESP.pdf

Chicago

Private Equity Stakeholder Project. Testimony in Support of S. 868  Private Equity Stakeholder Project. 2025. https://pestakeholder.org/wp-content/uploads/2025/08/7-25-25-MA-S.-868-Tesimony-PESP.pdf.

Wikipedia

{{cite press release |author=Private Equity Stakeholder Project |title=Testimony in Support of S. 868  Private Equity Stakeholder Project |date=25 July 2025 |url=https://pestakeholder.org/wp-content/uploads/2025/08/7-25-25-MA-S.-868-Tesimony-PESP.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{privateequitystakeholderproject2025testimony, author = {{Private Equity Stakeholder Project}}, title = {{Testimony in Support of S. 868  Private Equity Stakeholder Project}}, publisher = {Private Equity Stakeholder Project}, year = {2025}, month = jul, url = {https://pestakeholder.org/wp-content/uploads/2025/08/7-25-25-MA-S.-868-Tesimony-PESP.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }