Testimony in Support of Senate Bill 25-198, “Concerning Transparency in Transactions Involving Medical Care Entities”

The Private Equity Stakeholder Project (PESP) supports Colorado Senate Bill 25-198 to increase transparency and oversight of healthcare and dental care transactions. PESP argues that private equity firms use strategies like leveraged buyouts and 'roll-ups' to consolidate markets, which often leads to higher prices and lower quality of care. In Colorado, PESP identifies at least 59 such deals since 2020, with significant activity in dental care and outpatient specialties. The testimony highlights the risks of high debt loads, including the closure of Johnstown Heights Behavioral Health and the anticompetitive behavior of U.S. Anesthesia Partners. PESP recommends lowering the monetary threshold for transaction notices to the Attorney General and implementing regulations on debt and investor liability.

• Private equity firms utilize 'roll-up' strategies and 'stealth consolidation' to acquire multiple smaller companies, which can allow them to avoid Federal Trade Commission (FTC) review if deals fall below the Hart-Scott Rodino threshold of approximately $126.4 million in 2025.
• In Colorado, there have been at least 59 healthcare and dental deals involving private equity since 2020, with dental care (24 deals) and outpatient specialty providers (20 deals) being the most frequent.
• Private equity ownership in the healthcare sector is associated with negative patient outcomes, including a 25.4 percent increase in hospital-acquired conditions such as bloodstream infections and falls, as well as reduced nurse staffing levels.
• The private equity business model often employs high leverage, sale-leaseback of real estate, and debt-funded dividends, which can divert cash from operations and increase the risk of bankruptcy; in 2024, 21% of healthcare bankruptcies involved private equity-owned companies.
• In the dental sector, private equity firms use Dental Services Organizations (DSOs) to manage business operations and bypass regulations prohibiting investor ownership of dental practices, with some firms allegedly encouraging unnecessary implants over root canals to increase profits.
• The Colorado Attorney General reached a settlement with U.S. Anesthesia Partners (USAP), a private equity-backed entity, after it cornered the Denver-area surgical anesthesia market, resulting in reimbursement rates 30-40% higher than competitors and surgery delays for patients.
• Private equity firms increasingly use joint ventures with nonprofit health systems to expand their footprint and potentially evade antitrust scrutiny, as seen with Lifepoint Health and Compassus Health.

APA

Bugbee, M. (2025). Testimony in Support of Senate Bill 25-198, “Concerning Transparency in Transactions Involving Medical Care Entities”. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2025/06/CO-SB-198-4.10.25.pdf

Chicago

Bugbee, Mary. Testimony in Support of Senate Bill 25-198, “Concerning Transparency in Transactions Involving Medical Care Entities”. Private Equity Stakeholder Project, 2025. https://pestakeholder.org/wp-content/uploads/2025/06/CO-SB-198-4.10.25.pdf.

Wikipedia

{{cite press release |last1=Bugbee |first1=Mary |title=Testimony in Support of Senate Bill 25-198, “Concerning Transparency in Transactions Involving Medical Care Entities” |publisher=Private Equity Stakeholder Project |date=10 April 2025 |url=https://pestakeholder.org/wp-content/uploads/2025/06/CO-SB-198-4.10.25.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{bugbee2025testimony, author = {Bugbee, Mary}, title = {{Testimony in Support of Senate Bill 25-198, “Concerning Transparency in Transactions Involving Medical Care Entities”}}, publisher = {Private Equity Stakeholder Project}, year = {2025}, month = apr, url = {https://pestakeholder.org/wp-content/uploads/2025/06/CO-SB-198-4.10.25.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }