California’s Assembly Bill 3129 (AB 3129), which passed the legislature but was vetoed by Governor Gavin Newsom, was the latest attempt to increase scrutiny over private equity investment in health care. The bill would have made California the second state to require pre-approval of hospital and non-hospital private equity transactions and the first to modernize its ban on the corporate practice of medicine. This two-pronged approach represents a promising path for overseeing corporate consolidation and channeling private capital investment toward productive rather than extractive ends. However, even had it been signed into law, the bill’s narrow scope and myriad carve-outs would have limited its efficacy—and potentially caused unintended consequences.
Authors: Hayden Rooke-Ley, Erin C. Fuse Brown, Neil Mehta, Yashaswini Singh, and Christopher M. Whaley
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Last updated: December 6, 2024