Can Current Legal Tools Respond Adequately to Risks of Private Equity Investment in Health Care?

As private equity (PE) funds acquire a growing share of America's health care system, their focus has expanded to include not only hospitals and nursing homes but also physician practices. Some PE acquisitions have infused much-needed capital into resource-starved entities, but others have led to higher prices, diminished quality of services, and billing fraud. Some PE acquisitions have also forced viable entities into bankruptcy by stripping their real estate and other assets. This article explains how legal and regulatory responses to these outcomes can be impeded by corporate structures that PE funds commonly use to obscure responsibility. It also suggests reforms that could strengthen enforcement capacity.