Legislators focus on private equity’s role in healthcare as Steward faces challenges

Private equity involvement in the healthcare industry in Massachusetts has been increasing for a long time, and this trend has put financial troubles on the third-largest hospital system in the state, Steward Health Care. According to officials, it is not just one for-profit system that is affected by this trend. The involvement of private equity in healthcare transactions has more than doubled between 2013 and 2023, with private equity interests involved in about 63 percent of transactions between 2020 and 2023.

Leaders at the Health Policy Commission (HPC) have been discussing this trend since December, but the issues at Steward have brought them into sharper focus. David Seltz, Executive Director of the HPC, highlighted the need for urgent action to address the challenges posed by private equity, for-profit ownership, and industry consolidation in the healthcare sector. The HPC has been tasked with investigating gaps in the state’s regulatory framework and proposing policy changes to prevent similar problems at other facilities.

The acquisition of Steward’s Massachusetts properties by Medical Properties Trust led to significant financial difficulties for the company. Officials are now looking into factors that led to crisis at Steward Health Care system, which could be related to private equity involvement in healthcare transactions or other issues such as poor management or underfunding of facilities.

By Riley Johnson

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