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How might Oregon's new laws restricting private equity in healthcare operations affect regulations in other states, and what should investors and healthcare providers know about them?
In the debut edition of Committed Capital's PE Rx series examining the intersection of PE and healthcare, Dechert partners Markus Bolsinger and Jennifer Hutchens unpack the history and impact of Oregon's SB 951 and HB 3410, including their practical implications for PE sponsors and management service organizations, the state's evolving stance on the corporate practice of medicine and much more.
Key Takeaways
- With a 50‑state patchwork of healthcare transaction laws — most notably Oregon's recent restrictive legislation — PE healthcare investors must partner with their advisors to build multi‑jurisdictional compliance frameworks, including state‑tailored MSO/PC governance and documentation for their portfolio companies and their M&A pipeline.
- The time is now to embed regulatory optionality and protections in transactions: this could include explicitly underwriting CPOM/AG-enforcement risk, adding remedial covenants and closing conditions tied to compliance milestones, and maintaining alternate structures (friendly-PC, hospital-aligned service models, or non-clinical asset acquisitions) to pivot as certain US jurisdictions tighten.
- Given state-level activity, investors should also build a federal-ready posture and stakeholder strategy, with proactive approaches to enhanced transparency and governance (FMV documentation, clinician-led decision rights, board-level compliance oversight, quality/access KPIs), coordinated anti-trust strategy, and early briefing of stakeholders.
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