SB 1480, An Act Concerning Private Equity And Real Estate Investment Trust Ownership Of Hospitals And Nursing Homes

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE HUMAN SERVICES COMMITTEE

Tuesday, March 11, 2025

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning SB 1480, An Act Concerning Private Equity And Real Estate Investment Trust Ownership Of Hospitals And Nursing Homes. CHA opposes the legislation.

Connecticut hospitals and health systems care for patients, strengthen the state’s economy, and support vulnerable communities across the state. Every day, they work to improve healthcare access, affordability, and health equity. Even as they face ongoing challenges, hospitals provide world-class care to everyone who walks through their doors, regardless of their ability to pay. Hospitals also support an exemplary workforce as the largest collective employer in the state, contribute significantly to the state’s economy, and invest in their communities addressing social drivers of health.

SB 1480 requires the commissioner of the Department of Social Services (DSS) to ensure that in order for a nursing home or hospital to be eligible for Medicaid reimbursement, the nursing home or hospital must be free of any new direct or indirect ownership interests by private equity companies or real estate investment trusts recorded on and after October 1, 2025.

We acknowledge the damage that unregulated private equity investment has caused in certain situations in Connecticut when it controls a healthcare facility. We are concerned, however, that the blunt prohibition on private equity investment articulated in the bill 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 that patients need in the most appropriate settings. This work requires ongoing financial investments, which can come in a number of different forms. At their core, hospitals are seeking investments that support their mission, and we are concerned that a blanket prohibition on certain investments could diminish that ability.

We support reasonable measures to ensure that investments are transparent and that we do not experience additional scenarios where a hospital’s financial health is jeopardized by interests other than those of the community it exists to serve. However, blanket prohibitions on certain activities are generally not the cure. We look forward to continuing to work together on finding the right balance.

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