Bass, Berry & Sims attorney Angela Humphreys commented on pending legislation in the state of California that would give the attorney general the ability to prevent acquisitions between private equity firms, hedge funds, healthcare facilities or healthcare providers. The bill, California Senate Bill 977, stemmed from concern that over-consolidation in the market would result in higher healthcare costs for patients.

“It certainly will give PE firms a pause when they evaluate transactions in the state of California,” said Angela. “That said, there may be structuring opportunities for physicians in advance of a transaction that they may be able to implement.”

“It appears that as a result of this legislation PE is viewed as a target,” said Angela. “What is not appreciated is the level of compliance and operational efficiencies that PE firms bring to bear. In my experience, any PE-backed physician company has an enhanced level of compliance compared to what the individual practices may have had on a stand-alone basis.”

The full article, “What SB 977 Could Mean for PE Firms Investing in California’s Healthcare Industry,” was published by PE Hub on August 27 and is available online (subscription required). To read additional analysis on SB 977, read our firm commentary here.