New state laws tackle private equity’s growing role in health care

As more private equity firms buy health care physician practices and facilities, states are pushing back on acquisitions that some critics say could potentially gut health care infrastructure.

This year alone at least seven states, including California, Indiana, Massachusetts, Maine, New Mexico, Oregon and Washington, have enacted laws requiring more oversight over private equity acquisitions in health care. Private equity involves pooling resources from pension funds, endowments, sovereign wealth funds and wealthy individuals to buy controlling stakes in companies and boost their value — often with the goal of selling at a profit within a few years.

Private equity firms argue that their role in upgrading technology and increasing efficiency helps health care access, especially in rural