HB 5316, An Act Prohibiting Real Estate Investment Trusts From Acquiring Or Increasing Operational Control Over Hospitals Or Health Systems And Prohibiting Hospitals And Health Systems From Entering Into Sale-Leaseback Financing Transactions

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE BANKING COMMITTEE

Tuesday, March 3, 2026

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning HB 5316, An Act Prohibiting Real Estate Investment Trusts From Acquiring Or Increasing Operational Control Over Hospitals Or Health Systems And Prohibiting Hospitals And Health Systems From Entering Into Sale-Leaseback Financing Transactions.  CHA opposes this bill but supports SB 196, An Act Concerning Hospital Sale-Leaseback Agreements And Attestations Concerning Lack Of Private Equity Control Of The Hospital And Control Of Or Interference With The Professional Judgment And Clinical Decisions Of Certain Health Care Providers, as introduced, which is similar legislation seeking to address the same issue.

Connecticut hospitals make our state stronger by delivering nationally recognized, world-class care, supporting jobs and economic growth, and serving communities across Connecticut.  Every day, hospitals improve access, affordability, and health equity — providing care to all patients regardless of ability to pay.  At the same time, hospitals invest in their workforce and local communities, even as they navigate significant financial and federal challenges.

We acknowledge the damage that unregulated private equity investment has caused in certain situations in Connecticut when it controls a healthcare facility.  We have been concerned that blunt prohibitions on private equity investment could have unintended consequences: prohibiting modest yet important investments that support healthcare delivery in Connecticut.

As part of their commitment to the communities they serve, hospitals and health systems are continually looking to provide the services patients need in the most appropriate settings.  This work requires ongoing financial investments, which can come in a variety of forms.  At their core, hospitals are seeking investments that support their mission, and we have been concerned that blanket prohibitions on certain investments could diminish that ability.

We support reasonable measures to ensure that investments are transparent and to prevent future scenarios where a hospital’s financial health is jeopardized by interests other than those of the community it exists to serve.

We support SB 196, as introduced, rather than HB 5316, because SB 196 reflects language informed by public hearing testimony and developed in partnership with the Public Health Committee leadership and CHA during the last legislative session. 

Thank you for your consideration of our position.  For additional information, contact CHA Government Relations at (203) 294-7301.