Today, U.S. Rep. Bill Pascrell, Jr. (D-NJ-09) spoke out against private equity’s growing influence in industries across America as the Ways and Means Committee considered H.R. 5826, the Transparency in Health Care Investments Act. The committee approved this legislation requiring greater transparency for private equity firms that own and control medical care providers.

Today, U.S. Rep. Bill Pascrell, Jr. (D-NJ-09) spoke out against private equity’s growing influence in industries across America as the Ways and Means Committee considered H.R. 5826, the Transparency in Health Care Investments Act. The committee approved this legislation requiring greater transparency for private equity firms that own and control medical care providers.

“[P]rivate equity has had a cancerous influence on our health care industry. All too often, private equity is not interested in building, only pillaging. Their takeover of our healthcare providers has hurt Americans,” said Pascrell, who has led efforts in Congress to combat private equity wrongdoing. “Sunlight is the ultimate disinfectant, and through today’s legislation we can shine important attention on private equity’s increasingly negative impact on patient care and health care costs.”

Rep. Pascrell has been a leading voice in Congress on forcing private equity and Wall Street to play by the rules. In April 2018, he wrote a widely-disseminated op-ed for USA Today on how private equity firms destroyed Toys R Us, and warned that without proper reforms, more cherished retailers would be driven under by unregulated private equity practices.

Pascrell is also the main House sponsor of H.R. 1735, the Carried Interest Fairness Act of 2019, legislation to close one of the most egregious loopholes in the federal tax code. The carried interest loophole allows these Wall Street firms to pay the lower capital gains rate on their lucrative income (15 or 20%), rather than paying ordinary income rates (up to 37%) that all other Americans pay on their earnings from work. The ability of private-equity and hedge fund financiers to use the loophole impacts income inequality, as this tiny subset of executives make up some of the wealthiest citizens in the world. Indeed, since the recession, private equity has reaped historic profits, and at least 18 private equity executives are estimated to be worth two billion dollars or more each.

Between 2008 and 2018, private equity deals in health care in the U.S. more than doubled. In 2008, the U.S. saw 325 private equity deals and in 2018, that number grew to 788 deals, representing more than $100 billion in total. Private equity firms choose to enter markets that are highly fragmented, like individual physician practices, in order to consolidate and scale for better negotiating power. But this negotiating power allows quality of care issues and the practice of surprise billing to proliferate. Two private equity firms alone own 30 percent of the market for emergency services in hospitals. One of these groups roughly doubled its charges to patients once it took over management of an emergency department.