A panel of the US House of Representatives held a hearing last week on the role of private equity (PE) in the health care system. PE represents a world apart from Wall Street and the public markets, where anyone with even a modest nestegg can buy stocks in the listed firms and watch the ups and downs of those stocks’ price in the daily newspaper. In PE, of the other hamd, very well-heeled investors and funds to which they contributed invest directly in unlisted companies, much less transparent to public inspection.
The panel in question was the oversight subcommittee of the powerful Ways and Means Committee. The Ways and Means Committee is chaired by Rep. Richard Neal (D – Mass.). Its oversight subcommittee is chaired by Bill Pascrell (D – NJ).
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At the hearing, several representatives, including chairman Pascrell, expressed concern that too much of the investment capital flowing into health care — financing hospitals, medical devise manufacturers, biopharm research, nursing homes and so forth — is now opaque PE, and that this renders poorer results likely for patients and the public interest. It is not yet clear whether this elaborate expression of official concern will prove to have political “legs.”