Student warns private equity acquisitions can harm care quality, urges CPOM and transaction review in H.71

Jonathan Brooks, a Middlebury College student, told the Vermont House Health Care Committee on May 14 that growing private equity investment in health care nationally and in Vermont raises risks for quality, price and financial practices, and that lawmakers should incorporate corporate practice of medicine protections and stronger transaction review into Vermont’s H.71 bill.

Brooks summarized peer‑reviewed studies and interviews his group conducted and cited data showing increased adverse events and price increases after private equity acquisitions in some cases. He said some studies reported a 20–25.4% rise in hospital‑acquired conditions, a roughly 27.3% increase in patient falls and around a 37.7% rise in central line‑associated bloodstream infections in hospitals acquired by private equity. For nursing homes, he said some studies showed “up to an 11% increase in mortality.” He also cited a study finding about a $407 increase in total charges per inpatient day in acquired hospitals and average increases in outpatient specialty practice prices.

Brooks described business practices that can drive those results: consolidation and “roll‑ups” that can reduce competition, and financing arrangements that extract cash through monitoring fees, lease payments or interest. He cited a 2021 review (Gupta et al.) that identified monitoring fees, lease payments and interest as sources of increased costs after private equity takeovers.

He reviewed legislative models from other states. He said California Senate Bill 351 attempts to prohibit interference with clinical judgment and would make certain non‑compete and gag clauses unenforceable and give the attorney general enforcement authority. He said Massachusetts H.5159 requires ownership disclosure, cost and market impact reviews, and post‑transaction monitoring; he noted that Massachusetts’ law is already enacted. Brooks said Vermont’s H.71 contains corporate‑practice‑of‑medicine provisions, transparency requirements, limits on debt levels and whistleblower protections, but he recommended the bill be strengthened by explicitly listing prohibited management powers and by implementing a standardized front‑end screening (cost and market impact review) modeled on Massachusetts to flag risky acquisitions before they close.

Brooks argued these measures are warranted because private equity has expanded substantially over the last two decades and because Vermont ranks higher on private‑equity risk measures: he said a private equity risk index rates Vermont about 46 out of 100 overall and about 66 out of 100 on the health‑care subindex, which he attributed in part to the share of nursing homes under private ownership and the absence of corporate practice of medicine laws in Vermont.

When lawmakers and committee members asked follow‑up questions, Brooks described limits of the evidence—he acknowledged the literature is mixed, with some reports showing improved outcomes in some private‑equity‑owned hospitals—but emphasized the need for statutory guardrails to preserve clinical independence and long‑term stability.

No formal committee vote was taken. Brooks provided the committee with a handout comparing bills and asked lawmakers to consider tightening H.71 language to add explicit prohibitions on managerial control over clinical matters and a standardized acquisition screening process.