Legislators in Rhode Island are taking significant steps to address the impact of private equity on the health care system. On February 10, 2024, both the House and Senate voted to provide an $18 million state loan guarantee to support two critical safety net hospitals: Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence. This funding aims to assist a nonprofit in acquiring these hospitals, currently owned by an out-of-state private equity firm that has entered bankruptcy.
Senator Linda L. Ujifusa stressed the urgency of the situation, noting that the financial struggles of these hospitals could set a troubling precedent for similar institutions across the state. “We have important hospitals that are at risk of following the same path as Fatima and Roger Williams,” Ujifusa said, referring to the broader implications for Rhode Island’s health care landscape.
Legislative Action Against Private Equity
In response to a growing crisis, Ujifusa and Representative Kathleen A. Fogarty have introduced two bills aimed at safeguarding Rhode Island’s health care system. The legislation seeks to combat the potential abuses associated with private equity ownership in the medical sector. Ujifusa emphasized the need to transition from reactive measures to proactive solutions.
The proposed bills echo recent legislative efforts in Massachusetts, where Governor Maura Healey signed into law a pioneering measure to monitor private equity in hospitals. This Massachusetts initiative aims to mitigate the financial exploitation that critics argue has contributed to the downfall of hospitals and increased patient risks.
Ujifusa’s proposed legislation, while not as comprehensive as Massachusetts’s law, intends to establish a system of “transparency and early warning” to deter future private equity acquisitions of Rhode Island hospitals. The bill mandates that health care entities submit essential financial and organizational information to both the attorney general and the state Health Department prior to any transactions. This review process would assess whether the transaction could lead to reduced competition, increased costs, or diminished access and quality of care.
Strengthening Oversight and Accountability
The proposed legislation enhances the existing powers of the attorney general and the Health Department under the Hospital Conversions Act, along with anti-trust and consumer protection laws. Fogarty remarked, “This legislation strengthens transparency, oversight, and accountability for private corporate actors that can currently extract profits from Rhode Island health care providers with little public scrutiny.”
Ujifusa warned that the crisis faced by Our Lady of Fatima and Roger Williams is not an isolated incident but reflects a national trend of private equity harming hospitals across the United States. “Private equity has harmed hospitals across the country, including next door with Massachusetts and the Steward hospitals,” she stated.
Both legislators believe that health care should not be treated merely as a business, emphasizing that prioritizing profit over patient care can endanger lives. “Health care is such a fundamental right. It should not ever be treated as just a business, even though it sometimes is,” Ujifusa said.
The legislation draws inspiration from model laws developed by the National Academy for State Health Policy and insights from research conducted at the Brown University School of Public Health.
Ujifusa highlighted the significant consequences of hospital closures in Rhode Island, where each facility plays a crucial role in the community. The closure of Memorial Hospital in Pawtucket, for instance, led to an overwhelming influx of patients at nearby emergency rooms, underscoring the interconnected nature of health care services in the state.
As Rhode Island moves forward with these legislative efforts, Ujifusa and Fogarty have also introduced the Rhode Island Ban on the Corporate Practice of Medicine Act. This bill seeks to prohibit non-health care entities from owning medical practices or interfering with the professional judgment of health care providers. The legislators argue that such corporate structures undermine clinical independence and accountability, allowing profits to overshadow patient care.
Ujifusa concluded by reiterating the importance of legislative action in the face of limited federal oversight regarding private equity in health care. “When profit comes before patients, people get hurt and lives are put at risk,” she said, emphasizing the critical nature of the ongoing fight for health care integrity in Rhode Island.
