Private equity and the transparency tempest in health care

A commentary published October 21, 2026, by Bobby Guy, J.D., a health care deal lawyer with national law firm Polsinelli, argues that U.S. health care needs more sources of investment rather than new restrictions on private equity. The piece follows a series of health care scandals, including the collapse of Steward Health Care, a large hospital system, after its embrace of private equity investment, as well as academic studies linking private equity ownership to declines in patient care.

The policy response has been substantial. According to the commentary, by July 2026 three bills were pending in Congress and more than 75 bills were pending before state legislatures, all seeking to restrict or condition private equity investment in various areas of health care. The most recent federal proposal, the Health Over Wealth Act, reintroduced in July, would impose significant disclosure requirements on private equity health care investments and major penalties for understaffing. Its companion, the Corporate Crimes Against Health Care Act, would create criminal penalties for "asset-stripping."

Guy draws a parallel to the period after the Enron and WorldCom scandals, when Congress enacted the Sarbanes-Oxley Act (SOX) in 2002. He argues SOX made it substantially harder and more expensive for U.S. companies to go public and remain public. He cites data showing the U.S. created more than 7,000 public companies from 1982 to 2002, compared with fewer than 3,000 in the nearly 25 years since. He says this has concentrated the S&P 500, where roughly 40% of value sits in the top 10 companies, and reduced the Wilshire 5000 to approximately 4,300 companies. In his view, private equity became the primary source of growth capital as a result, and because securities laws limit private equity investment to accredited investors, the broader public has been largely excluded from new company investment.

Guy argues that with only four sources of equity (public markets, private equity, nonprofit giving and government funding), restricting private equity in health care would leave only charitable dollars and tax revenue, which he says are insufficient for the sector's needs, including investment in artificial intelligence, addressing nursing shortages, serving an aging population and adapting to reimbursement changes. He recommends restoring public market access for health care companies, arguing the pendulum should swing back toward the middle rather than returning to the pre-SOX environment. He also notes that the transparency lawmakers seek from private equity already exists for public companies through quarterly reporting, and warns that overreaction could make health care worse.