Private equity's growing influence in healthcare took center stage during the California State Senate's Business, Professions and Economic Development Committee meeting on April 21, 2025. Lawmakers emphasized the urgent need to prioritize patient care over profit, highlighting concerns about the rapid turnover and accountability issues associated with private equity investments in medical practices.

A key speaker pointed out that private equity is the fastest-growing segment in healthcare, with a staggering twenty-fold increase in recent years. This growth raises alarms as private equity firms typically hold medical practices for shorter periods—averaging just two years—before selling them off. This quick turnover diminishes accountability and oversight, leading to a cycle of cost-cutting that negatively impacts patient outcomes.

The speaker cited numerous peer-reviewed studies indicating that investor-driven models often prioritize profits at the expense of long-term patient care. As private equity firms buy and sell management service organizations, they create a system where physician turnover rises, appointment availability decreases, and healthcare costs for patients escalate.

The committee's discussions underscored the pressing need for regulatory measures to ensure that patient care remains the top priority in a rapidly changing healthcare landscape. As the meeting concluded, the focus remained on finding solutions to balance private investment with the essential quality of care that patients deserve.