Bill Takes Aim at Private Equity’s Role in Healthcare

As Oregon goes, so goes the nation. That’s the hope of a Democratic US senator who wants to limit private equity’s role in healthcare via legislation modeled on the Beaver State’s strict policies.The Stop Corporate Takeovers of Physicians Act, introduced this month by Senator Elizabeth Warren (D-Mass.) and congressional colleagues, aims to tightly control who can own a medical practice or contract for medical services.“It is a federal override,” said Chicago attorney John Saran, JD, a partner with the law firm of Holland & Knight. “These legislators think the Oregon model is what is needed right now.”The bill’s chances are slim while Republicans control Congress. Still, the legislation reflects a growing skepticism that’s playing out nationwide as states pass their own laws regulating private equity’s role in healthcare.Here’s a look at what the bill aims to do:What Would the Warren Bill Do If It Passes?“The bill would generally require medical practices to be majority-owned and governed by practicing clinicians,” said Michael Fenne, senior policy coordinator with the Private Equity Stakeholder Project, a watchdog group that has endorsed the bill.Private equity firms and other nonclinician corporations would not be able to own practices or control them through management companies, he said. Hospitals, hospital-affiliated clinics, and nonprofit or public providers would be exempt from the ownership rules.Would Private Equity Firms Have to Sell Medical Practices?Existing arrangements would have 1 year from enactment to comply with the law. That could require selling a practice or unwinding contracts that give control to a private equity-backed management company, Fenne said. Courts could order companies that violate the law to repay the money they received in a transaction, and they also could be excluded from Medicare and Medicaid.”Michael Ludwig, a partner with the business consulting firm Cherry Bekaert Advisory who’s based in Tysons, Virginia, raised questions in an interview about how this process would work.“Presumably this would be an arm’s-length transaction, which raises a number of critical questions such as: How would physicians finance such a transaction? Would physicians even be interested in this?”Would the Bill Do Anything Else?The bill would restrict how corporate owners and management companies can shape everyday patient care, including staffing levels, schedules, and time with patients, Fenne said. It would also limit noncompetes and prohibit nondisclosure and nondisparagement agreements, which can prevent clinicians from discussing unsafe working conditions or concerns about patient care.Ludwig predicted that the bill could force physicians “to reengage in activities such as payroll, human resources, procurement and vendor management.”Why Is This Bill Being Introduced Now?There’s been a growing backlash against private equity’s role in healthcare as critics accuse investors of making quick profits at the cost of patient care.As Medscape Medical News noted in a March 2026 report, private equity firms are buying and then selling medical practices for profit. “For some doctors, these sales offer financial relief, management support, or a retirement strategy. But they can also come with deep cuts to physician autonomy, staff, income, and even…the shuttering of a practice.”Private equity has also come under intense fire amid the collapse of Steward Health Care, which led to the closure of two hospitals in Massachusetts, home to Senator Warren. The private equity firm Cerberus Capital Management initially made a reported $800 million in profit.What Do Advocates for Private Equity Say?In a statement, Will Dunham, CEO and president of the American Investment Council, which represents private equity investors, said “restricting investment in healthcare limits access to care. Private equity provides physician practices with resources to broaden patient access and modernize equipment. It also gives doctors operational support, including managing burdensome paperwork, so they can spend their time focused on caring for patients, particularly in underserved areas.”What Are States Doing About Private Equity in Healthcare?Eleven states — including California, Illinois, and Massachusetts — have enacted laws over the last 2 years aimed at increasing oversight of private equity transactions in healthcare, according to the Private Equity Stakeholder Project.Oregon’s law is especially strict. It bans nonclinicians from owning more than half of many medical practices, Oregon Public Broadcasting reported. In 2025 the governor signed a law that limited the operations of management services organizations, seen as a loophole that allowed corporate control.As the Private Equity Stakeholder Project’s Fenne explained, the Oregon bill “targets arrangements in which a physician owns the practice on paper while a management company controls it.”The new Warren bill “is effectively taking the Oregon version of corporate practice and applying it across the country,” said Saran, the Chicago healthcare attorney.Does the Bill Have Any Chance of Passage?It’s not likely to pass in its current form even if Democrats gain control of Congress in the upcoming midterm election. In general, red states have resisted attempts to limit private equity’s role in healthcare, and Republicans seem likely to do the same.However, “the legislation plants a significant flag” in Congress as Democrats look to gain power, said Jordan Brossi, senior public affairs advisor with the law firm Holland & Knight. “It highlights where healthcare policy in the next Congress may go, either in an investigative or oversight capacity or as part of a larger legislative package related to healthcare access and affordability.”If the bill were to pass, Brossi said, it would likely face legal challenges.“Historically, corporate practice of medicine requirements have largely been creatures of state law, with states taking different approaches to physician ownership, management arrangements, and clinical control,” Brossi said. “This legislation would establish a significant new federal role in an area traditionally regulated at the state level.”What Else Is Coming Next?Chicago health attorney Saran said the legislation “is part of a broader discussion that’s going on in the states. I would not be surprised if come 2027, we see a handful of states try to propose and pass Oregon-esque laws.”The experts cited in this article had no relevant disclosures.