HPC premieres BESIDE Investment Program video, addressing maternal health inequities through doula care
BOSTON — Today, the Massachusetts Health Policy Commission (HPC) reviewed a new HPC policy brief featuring potential state policy options for providing expanded oversight of private equity investments in Massachusetts health care.
Trends show that private equity investment has an increasing role in health care both nationally and in Massachusetts. An HPC analysis of health care provider mergers and acquisitions found that 51% of health care provider transactions in Massachusetts from 2013-2023 involved private equity firms.
Private equity investments in the Massachusetts health care market have been steadily increasing in recent years, and have been particularly active among behavioral health, dental, home health providers, and certain specialty providers. Of the 199 health care providers transactions from 2013-2023 in the HPC’s analysis, 101 (51%) involved private equity firms.
Private equity investments utilize unique financial strategies to generate profit that can be destabilizing to the health care market, while being associated with worse outcomes and higher costs. Additionally, private equity health care investments often fall outside of traditional state and federal market oversight and review authority, leading to a lack of transparency and oversight of these transactions.
“Private equity investments account for over half of the health care transactions that have come before the HPC in the past decade,” said Deborah Devaux, HPC Board Chair. “It is critical that all transactions in the health care marketplace, including private equity transactions, are carefully considered for impact on health care cost, quality, access, and equity.”
“The need for urgent action could not be greater to ensure that every actor in our health care system is operating in good faith, by a commonly accepted set of rules,” HPC Executive Director David Seltz said. “The HPC applauds the Legislature’s work to better understand the role of private equity in our health care system and develop legislation to increase oversight of these transactions. We must work together to increase transparency and robust oversight of all transactions, for the stability of our health care market and the health of our residents.”
The HPC outlined potential policy levers to enhance and modernize state oversight of these types of transactions. Read the full HPC Policy Brief: Private Equity Investments in Massachusetts Health Care and State Policy Opportunities.
Key Findings: Private Equity Investments in Massachusetts Health Care
- HPC analysis of health care provider mergers and acquisitions found that 51% (101 of 199) of health care provider transactions in Massachusetts from 2013-2023 involved private equity firms.
- Both the number of private equity investments in Massachusetts and their share of all transactions accelerated over the last decade: from 2013 to 2016, 32% of transactions (19 of 60) involved private equity, compared to 52% from 2017 to 2020 (33 of 63) and 64% from 2021 to 2023 (49 of 76).
- Private equity investments in Massachusetts have been particularly active among behavioral health, dental, home health providers, and certain specialty providers.
State Policy Opportunities to Increase Oversight and Transparency of Private Equity Investment in Health Care
Broaden existing state-level health care transparency and oversight processes to include private equity.
Amend the HPC’s Registration of Provider Organization (RPO) program to:
- Collect information from a broader range of provider types, including those with revenue primarily from self-pay and from Medicare and Medicaid.
- Strengthen enforcement mechanisms for non-compliance to ensure all required information is provided in a timely manner.
Amend the HPC’s Material Change Notice (MCN) process to ensure that all significant health care transactions involving private equity require notice to the HPC, including:
- Significant investment by private equity or for-profit in an existing health care provider
- Acquisition of a provider’s assets (such as real estate) by any entity including private equity investors such as in a sale-leaseback
Consider a process for imposing conditions upon parties to transactions, such as requiring that essential services and/or staff be maintained for a specific period of time, the fulfillment of specific requirements for charity care or community benefits, limitations on debt as well as dividend distributions, maintenance of adequate financial reserves, and other conditions related to quality standards, ongoing compliance monitoring, and exit and sale.
Reduce opportunities for investors to engage in harmful activities.
- Address the inefficiencies and market failures that make health care an attractive opportunity for investors through requiring site-neutral payments, adopting a default out-of-network payment rate for surprise billing scenarios as well as potentially further expanding out-of-network protections, reducing unwarranted price variation, and limiting excessive provider prices.
Consider additional opportunities to mitigate potential harms.
- Engage in health planning to ensure the supply of health services aligns with need.
- Reduce administrative complexity and consider other ways to support provider independence.
- Mitigate potential harms from private equity investment in the health care market, through enhancing consumer and worker protections, limiting potentially harmful financial strategies like sale-leasebacks and dividend recapitalizations, and strengthening corporate practice of medicine prohibitions to keep decision-making with medical professionals.
HPC Board Meeting
HPC staff updated commissioners on notices of material change currently under review, including the proposed Stewardship-Optum transaction, which was submitted by Stewardship Health at the end of March 2024. While OptumCare has publicly disclosed that it no longer intends to pursue the transaction, the notice of material change has not yet been withdrawn.
The meeting concluded with a review of the HPC’s activities to advance health equity , with commissioners viewing a new video highlighting the impact of the Birth Equity and Support through the Inclusion of Doula Expertise (BESIDE) Investment Program. BESIDE addressed inequities in maternal health outcomes by providing doulas to improve the care and experience of Black birthing people.
Commissioners voted to approve the HPC’s 2025 Fiscal Year budget proposal.
New HPC Website
The HPC announced the launch of a newly redesigned and more accessible website, MassHPC.gov. The website features new HPC Research and Policy Spotlights: timely and relevant research on issues facing residents of the Commonwealth, including health equity, maternal health, the health care workforce, and more.
The redesigned website also features updated Office of Patient Protection (OPP) web pages, redesigned to be more accessible and user-friendly, supporting OPP’s work safeguarding health care consumer protections in the Commonwealth.
A recording of the board meeting and the BESIDE video are available on the HPC’s website. Presentations are available on the HPC’s website.
