Diminishing/Eliminating Private Equity Acquisition of Medical Practices in Maryland

MEDCHI, THE MARYLAND STATE MEDICAL SOCIETY
HOUSE OF DELEGATES

INTRODUCED BY: Montgomery County Medical Society

SUBJECT: Diminishing/Eliminating Private Equity Acquisition of Medical Practices in Maryland

REFERRED TO:

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  1. Whereas, the independent practice of medicine is challenged by the ever increasing regulations
  2. and/or legislation, decreasing third-party payments and rising costs; and
  3.  
  4. Whereas, there is increasing acquisition of medical practices by for-profit entities, which seek to
  5. control the medical delivery market; and
  6.  
  7. Whereas, these entities’ interests is often greed to enhance profits by decreasing expenses and
  8. reducing quality of care and access to patient care and decreasing affordability of care; and
  9.  
  10. Whereas, the private equity companies create new corporate structures to circumvent the laws which ban the corporate practice of medicine, like in Maryland; and
  11.  
  12. Whereas, earlier this year, the Federal Trade Commission and Department of Health & Human
  13. Services launched a cross-government inquiry on the impact of corporate greed in health care (1) ; and
  14.  
  15. Whereas, according to the Millbank Memorial Fund (2), many states are enacting laws which require
  16. private equity to adhere to regulations which require notification to be given to the states’ attorneys
  17. general before acquisitions can be made, and
  18.  
  19. Whereas, according to the Wall Street Journal (3) , more than a dozen states are pushing back
  20. against private equity backed consolidation of medical businesses; and
  21.  
  22. Whereas, California, New York, Oregon and Colorado have enacted laws which significantly
  23. diminish the ability of private equity corporations in the areas of transparency, governance, and
  24. transition of control, therefore be it
  25.  
  26. RESOLVED, that MedChi seek and/or support legislation or regulation which diminishes and/or
  27. eliminates the ability of private equity companies to acquire medical practices in Maryland.

    Sources:

    1) Federal Trade Commission: https://www.ftc.gov/news-events/news/press-releases/2024/03/federal-trade-commission-department-justice-department-health-human-services-launch-cross-government

    2) Milbank Memorial Fund: https://www.milbank.org/quarterly/opinions/private-equity-impacts-on-health-care-federal-and-state-legislative-and-regulatory-actions-will-it-matter/https://www.milbank.org/quarterly/opinions/private-equity-impacts-on-health-care-federal-and-state-legislative-and-regulatory-actions-will-it-matter/

    3) Wall Street Journal: https://www.wsj.com/articles/state-private-equity-healthcare-takeovers-cb43f70b