Cristin McCarthy Vahey

Dear Neighbors,

In keeping with the theme of healthcare funding, this week, I’d like to share a little bit about the role of private equity. I’ll also share a bit about events and activities with all of you.

This week, the Public Health Committee heard testimony on SB 1507 which proposes a prohibition of private equity ownership in healthcare in our state. The bill comes in response to the bankruptcy of three Connecticut hospitals as a result of the actions of Prospect medical and Medical Properties Trust.

And today I joined Senator Chris Murphy, Public Health Committee co-chair Senator Anwar, our Public Health and Social Services Commissioners, multiple advocates, and stakeholders for a roundtable discussion in Waterbury on private equity. It was helpful to hear about the specific impacts on care, facility maintenance, and employee retention.

A growing body of research examines the impact of private equity investment on cost of care, access to care and the quality of care.

There is evidence that costs are going up, and outcomes are getting worse. Many argue that our healthcare system’s mission to remain singularly focused on patient care is clouded when paired with private equity investment. A private equity company is a for-profit company obligated to its shareholders and focused on growth in investment – i.e. profit.

Here in Connecticut, in neighboring Massachusetts, Pennsylvania, and elsewhere around the country, private equity firms have taken advantage of the lack of transparency requirements and guardrails to take the value out of healthcare systems and pay shareholders. As a result, three Connecticut hospitals are now engaged in bankruptcy proceedings. State and local taxes are unpaid, providers are uncertain about the future of their jobs, and the local communities are losing access to care.

As we listened to testimony yesterday, we heard from providers who own independent practices and work with private equity-owned Managed Service Organizations, who provide capital investment, IT support and office functions. They would like to continue those arrangements, especially in cases where there is no clinical control of decision making by private equity firms.

We heard that it will be important to clearly define what is meant by private equity. And we heard that whatever guardrails are in place, the markets and the development of financial instruments can move much more quickly than the legislative process. This means that we need to create the proper guardrails even if some level of prohibition were to be put into effect.

The next steps are that we will continue to work with our committee colleagues, stakeholders, and the Governor’s office. The Governor and the Attorney General have proposed HB 6873 to address the issue of private equity investment and we will work alongside them to find the best solution. The Public Health Committee will continue to prioritize this issue.

March is a busy time of year in the legislature and here at home. In addition to Public Hearings and Committee Meetings to vote bills out to the floor, I was honored to join in many community events and greet visitors to the Capitol.

Congratulations to Fairfield for winning this year’s Democracy Cup for the Large Town category with over 84.5% participation.

I was thrilled to join the State Delegation, our Clerk, Registrars, Secretary of the State, Deputy Secretary and Fairfielder Jennifer Barahona and our Fairfield League of Women Voters members, Joyce Flynn and Helen D’Avanzo, pictured below. The Secretary honored poll workers who have served for over 10 and over 20 years. Congratulations!

Last week, my colleagues and I joined SEIU 1199 to recognize the five year anniversary of the COVID shutdown and show support for our frontline healthcare workforce. They spoke of the critical role of Medicaid, the importance of fair wages, and the need for pensions.

Earlier this month, I was please to participate in the UConn Campaign School for Social Workers and to honor Fairfielder Tanya Rhodes Smith. Tanya has led the Campaign School for 11 years and has brought the school to 14 other states. She has helped to train over 2,000 people. Congratulations, Tanya, as you move on to your next chapter.

Last Friday, I joined our Governor, Comptroller, Secretary of the State, colleagues, and most importantly, the St. Patrick’s Day Parade Committee for the Greater Bridgeport St. Patrick’s Day Parade. Thanks to all who organized the event and participated. Mark your calendar for next year! It was a tremendous community event.

Wishing you a wonderful weekend. As always, please feel free to reach out directly with your ideas, questions, or concerns. You can reach me by phone at (860) 240-8585 or (203) 522-3037.

Take care,

Cristin McCarthy Vahey