The California legislature has passed a bill intended to curb private equity’s influence in healthcare.
The legislation grants the California attorney general the authority to take legal action against private equity firms and hedge funds that “interfere with or exert control over the healthcare decisions of doctors and dentists working for medical practices in which they invest,” according to a Sept. 12 news release from Sen. Christopher Cabaldon, the bill’s sponsor.
The bill also voids non-compete clauses that restrict a physician or dentist from practicing or speaking out about concerns if they resign or are terminated from a practice controlled by a private equity investor.
Private equity acquisitions are the fastest-growing segment of healthcare acquisitions in California, according to the release.
The California Medical Association supported the legislation. CMA President Shannon Udovic-Constant, MD, said the legislation is about “protecting the integrity of the physician-patient relationship and making sure that health care decisions are guided by what is best for patients, not what maximizes profits.”
The legislation now heads to Gov. Gavin Newsom’s desk.
