SACRAMENTO–Assemblymember Jim Wood (D-Healdsburg) is joining with Attorney General Rob Bonta to introduce AB 3129 to address consolidations in health care.
“A majority of studies show that health care consolidations are not lowering costs for anyone but the entities consolidating, including those acquired by private equity or hedge funds,” said Wood. “We are often led to believe that these consolidations will save money and that it’s good for consumers, but what we are actually seeing in health care is that it reduces competition and results in higher corporate and shareholder profits. I also have real concerns about how these consolidations have the potential to reduce or limit access to certain health care services, like reproductive care.”
AB 3129 authorizes the state Attorney General (AG) to grant, deny or impose conditions to a change of control or acquisition between a private equity group or hedge fund and a health care facility, provider group or both if those changes would have anticompetitive effects or negatively impact access or availability of health care services to the community. It also reinforces the bar on the corporate practice of medicine, providing a fundamental protection against the public danger that medical care could be subject to commercial exploitation through the influence of others, such as private equity or a hedge fund.
“As a dentist who practiced for nearly 30 years, I understand why it is essential and critical that this bill contain a component that protects physicians from others interfering with their practice of medicine,” said Wood. “It prohibits a private equity group or hedge fund involved with a physician or psychiatric practice in the state from controlling or directing that practice or from entering into an agreement with the practice to manage any of its affairs in exchange for a fee.”
“At the California Department of Justice, we believe that the health care system should serve patients. Yet, too often, private equity has served corporate profiteers by maximizing their profits at the expense of access, quality, and affordability of healthcare for Californians,” said Attorney General Bonta. “Today’s legislation not only curtails harmful transactions but also stops practices that undermine the practice of medicine.”
“Although opponents have tried to argue that consolidation helps integrate care and control costs, it appears that only their own studies show that – not the many independent, objective studies that show these types of transactions in health care have, in fact, resulted in higher health care costs and profits for the corporations and investors rather than lower costs for patients and health care consumers,” said Wood.
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