Private equity has become a flashpoint in healthcare as clinicians, administrators, politicians and patients respond to increased consolidation efforts throughout healthcare.
In a viewpoint published Feb. 25 by CT Mirror, author Aashka Shah, MD, a resident at New Haven, Conn.-based Yale School of Medicine, outlines a recent history of the impacts of private equity activity in the state’s healthcare system and legislators’ proposals for future regulations.
In 2025, Connecticut saw the closure of three hospitals in the state, including Waterbury (Conn.) Hospital, Rockville (Conn.) General Hospital and Manchester (Conn.) Memorial Hospital, when their private equity-backed owner, Los Angeles-based Prospect Medical Holdings, declared bankruptcy.
Dr. Shah also notes that the closures came after Senator Chris Murphy, a Democrat from Cheshire, reported unsafe patient conditions at the hospitals due to budget cuts. Service cuts were also a consequence of the budget cuts, including the emergency department and outpatient behavioral health center at Rockville General, Dr. Shah writes.
Connecticut has seen the proposal of several bills related to increased oversight of private equity in healthcare since 2023, but none had previously been signed into law. However, the 2025 legislative session saw 13 bills related to private equity in healthcare be introduced in the wake of the Prospect closures.
While momentum built throughout the legislative session, time ultimately ran out on codifying the proposals, Dr. Shah writes. Governor Kelly Ayotte’s bill, HB 6873, would have increased oversight over nearly all healthcare transactions in the state, while another proposal, SB 1507, would have banned any private equity investment in hospitals. Back-and-forth between the governor’s office and lobbyists ultimately delayed a final vote on these proposals in 2025.
Since the end of the 2025 session, however, several new bills have already been proposed that aim to create stricter regulation around private equity in healthcare. SB 196, for example, would require hospitals to attest that no private equity group has a controlling interest in the hospital or is interfering with the clinical judgment of healthcare providers.
Dr. Shah urged legislators to support this proposal in the year ahead, writing that while Connecticut is “not the first state to have hospitals be bankrupted by private equity, we can be one of the first to prevent private equity from taking them over in the first place.”
