Pascrell Again Sounds Alarm on Wall Street Seizure of American Hospitals

First Oversight Subcommittee hearing focuses on U.S. health care

WASHINGTON, DC – U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Ranking Democratic Member of the House Ways and Means Subcommittee on Oversight, today used the panel’s first hearing to continue to highlight the growing influence of private equity on American health care.

“We cannot lose sight of the harm Wall Street has done to our entire health system,” Congressman Pascrell warned. “By tightening their grip over health care, corporate tycoons place profits over patients, big bucks over the Hippocratic Oath.”

In 2022, private equity investment in health care grew to $90 Billion. Private equity control stretches like an octopus, with tentacles in large and small hospitals, physician practices, dental practices, and nursing homes.

Congressman Pascrell has been the leading voice in Congress on Wall Street’s growing control of American hospitals.

On March 25, 2021 as Chairman of the panel, Pascrell convened an oversight hearing which revealed a disturbing lack of transparency, declining standards of care, and horror stories from hospitals and nursing homes controlled by Wall Street. Pascrell expanded on the hearing’s findings in an April 2021 op-ed in the Bergen Record of New Jersey.

Rep. Pascrell has been a leading voice in Congress on forcing private equity and Wall Street to play by the rules. In April 2018, he wrote a widely-disseminated op-ed for USA Today on how private equity firms destroyed Toys R Us, and warned that without proper reforms, more cherished retailers would be driven under by unregulated private equity practices.

Pascrell is also the main House sponsor of H.R. 2686, the Ending Wall Street Tax Giveaway, legislation to close private equity firms’ favorite loophole in the federal tax code: carried interest. The carried interest loophole allows these Wall Street outfits to pay the lower capital gains rate on their lucrative income (15 or 20%), rather than paying ordinary income rates (up to 37%) that all other Americans pay on their earnings from work. The ability of private-equity and hedge fund financiers to use the loophole worsens income inequality, as this tiny subset of executives make up some of the wealthiest citizens in the world.

Congressman Pascrell’s prepared remarks are below.

Congressman Pascrell Prepared Remarks

Oversight Subcommittee Hearing on Tax-Exempt Hospitals and the Community Benefit Standard

April 26, 2023

Mr. Chairman, I am eager to kick off our first Oversight Subcommittee hearing of the 118th Congress. Congratulations on your gavel, I hope to have it back soon.

Our committee holds a sacred duty to ensure hospitals respond with the highest quality of care. We know one size does not fit all to provide the care our communities need.

Tax-exempt hospitals deliver unmatched benefits and are the very cornerstone of our hospital system. The nonprofit network cares for our most vulnerable. These hospitals collectively deliver more in benefits and charity care than other hospitals.

There are nearly 3,000 not-for-profit hospitals across America. In my state New Jersey, 62 of these institutions keep our communities healthy.

I am committed to robust oversight of our tax-exempt hospitals. Many non-profit hospital systems can and must do better.

But we cannot lose sight of the harm Wall Street has done to our entire health system.

This subcommittee must continue taking a closer look at the opaque ownership of hospitals. Private equity control is often shielded like a Russian nesting doll, designed to block oversight by the government – and from patients.

By tightening their grip over health care, corporate tycoons place profits over patients, big bucks over the Hippocratic Oath.

Our committee has the receipts. As Chairman, I led a hearing last Congress on the impacts of private equity on health care. What we exposed still needs fixing.

Wall Street loads debt onto companies, sometimes leading to bankruptcy, facility closures, fired workers, neglected patients, and hurt communities.

In 2022, private equity investment in health care grew to $90 Billion. PE stretches like an octopus, with tentacles in large and small hospitals, physician practices, dental practices, and nursing homes.

These trends demand further investigation. Our committee cannot ignore how threats to hospitals harm our communities and access to care.

Thank you, Mr. Chairman. I yield back.