Warren Introduces Bill to Ban Private Equity From Owning Medical Practices

A group of Democrats has introduced bicameral legislation to ban private equity from owning medical practices as increasingly widespread corporate ownership continues driving up health care costs each year.

The bill was introduced Wednesday by Sen. Elizabeth Warren (D-Massachusetts) with the support of 12 other members of the Senate and House. The legislation was based on a law in Oregon aimed at beating back the corporate takeover of health care providers that took effect this year. The law has already been successfully used by physicians in Eugene to prevent a corporate takeover.

Warren’s bill would ban for-profit corporations like private equity funds and insurance companies from owning medical practices, while also prohibiting entities known as management services organizations, which conduct business operations for practices, from controlling such offices.

Such a prohibition could help stanch the rapid rise in health care costs. Between 2000 and 2004, KFF found, costs for medical care far outpaced costs for goods and services at large, increasing by 121 percent compared to 86 percent for the rest of the consumer price index.

The growing grip of private equity on health care, like in other sectors, has played a major role in this rise in costs. In 2000, private equity invested $5 billion in health care; by 2024, this had risen to $104 billion. Since private equity firms are focused not on patient care, but on maximizing profits, research has found that private equity ownership is associated with worse outcomes for patients as well as higher costs, particularly in nursing homes.

In large part due to rising costs for care, health coverage costs are slated to rise precipitously next year. A recent survey found that employers expect health care plan costs to rise by an average of 11 percent per worker in 2027, unless benefits are cut. This could translate to higher costs for workers and patients on job-based insurance if employers shift the burden onto them; costs for plans through the Affordable Care Act are also expected to rise significantly due to Republicans’ massive slashes via the One Big Beautiful Bill.

“Patients want to know that decisions about their health are being made by their doctors, not by Wall Street investors,” said Warren. “If we’re going to lower costs and un-rig the health care system, we need to stop the corporate takeover of medicine.”

The passage of the bill could also help allow physicians to retain control in their practices, including in their medical decisionmaking, at a time when private equity and other corporate actors are close to gobbling up almost the entire field of medical providers.

As the lawmakers point out, research has found that, as of this year, 82 percent of physicians are employed by hospitals or other corporate entities as the industry shifts away from private practices. This is a 20-point increase from 2019, when 62 percent of physicians were employed this way.

The legislation has been backed by numerous health and advocacy groups, who say that private equity must be barred from standing between patients and receiving good health care.

“A prohibition is only as strong as its enforcement, and this bill backs its corporate practice of medicine prohibition with three enforcement paths: the FTC, state attorneys general suing on behalf of residents, and physicians themselves through a private right of action with treble damages,” said Marco Fernandez, president of the Association for Independent Medicine. “That layered enforcement, paired with mandatory divestment, is what gives this bill teeth that earlier [Corporate Practice of Medicine] laws have often lacked.”