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Witness warns private equity ownership raises costs, reduces staffing and risks rural access in New Mexico
Summary
An American Economic Liberties Project senior fellow told the committee that private equity acquisitions of hospitals and practices are linked to higher costs, reduced staffing and worse patient outcomes; she urged stronger transaction oversight, corporate‑practice limits and targeted conditions on acquisitions.
Olivia Webb Kosloff, senior fellow at the American Economic Liberties Project, testified to the Legislative Health & Human Services Committee that private equity (PE) investment in health care frequently prioritizes short‑term returns over long‑term patient care and community stability.
Kosloff summarized evidence from peer‑reviewed studies and investigative reporting that PE‑owned hospitals and nursing homes tend to show staffing reductions, worse patient‑safety outcomes and higher costs. Citing JAMA and Health Affairs research, she said some studies link PE acquisition to measurable increases in hospital‑acquired conditions and post‑acquisition reductions in registered nurse hours.
Why it matters: New Mexico, Kosloff said, has an outsized exposure to private equity ownership in health care and therefore faces heightened risk to service continuity and rural access. Committee members raised local examples and investigative reporting on Memorial Medical Center in Las Cruces as a case study under PE ownership.
Key points and evidence: Kosloff described common PE tactics — leveraged buyouts, sale‑leasebacks, management fees, staffing cuts and dividend recapitalizations — and said these can leave acquired hospitals vulnerable to insolvency and service cuts. She said national studies show higher rates of closures and bankruptcies tied to PE portfolios in recent years and noted that New Mexico has one of the highest shares of PE‑owned hospitals and nursing homes in national risk assessments cited in her materials.
Policy options proposed: Kosloff described steps the legislature could take: make oversight of hospital and practice transactions permanent (citing SB 15 and HB 586 as existing paths), expand review authority to include physician practices and nursing homes, impose transaction conditions (investment commitments, limits on sale‑leasebacks, staffing requirements), consider site‑neutral Medicaid payment policies to reduce consolidation incentives, and strengthen corporate‑practice‑of‑medicine rules to limit non‑clinician operational control.
Committee exchange and next steps: Lawmakers debated national findings versus New Mexico‑specific data; several asked Kosloff to provide citations and state‑level numbers on hospital ownership, staffing changes and bankruptcies. Some members warned that stricter limits could reduce access to capital and risk closures; others said oversight and reinvestment conditions are necessary to protect patients and rural communities. Kosloff offered to follow up with citations and recommended the committee request targeted state data to evaluate policy designs.
Where it stands: The hearing did not produce legislative votes. Committee members asked for follow‑up materials, including specific studies Kosloff cited and state‑level ownership and staffing data to inform potential legislative steps.
