State Regulators Ramp Up Pressure on PE in Healthcare

Antitrust attorney Bill Katz was quoted in a Private Funds CFO article about the increasing scrutiny of private equity's role in the American healthcare from state regulators, enforcers and legislators. Government agencies such as the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) have launched their own investigations into private equity's place in the market, alongside state legislation in California, Oregon and Indiana that attempts to crack down on deals. Mr. Katz highlighted the growing attention surrounding firms' business model, saying the heightened focus on cost increases and corporate management are propelling the pushback. He also advised private equity managers to be proactive in assessing their portfolio companies' competitive positions and engaging strategically with policymakers to push back against inaccurate stories and unfair attacks.

"We're seeing more than just skepticism at both levels, it's a general distaste for what is villainized – and sometimes mislabeled – as the private equity business model. What is really driving this are decades-old concerns about rising costs and corporate control; what's new is the willingness to single out private equity to shoulder the blame," he said.

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