Directs the commissioner of health to establish a demonstration program authorizing private capital investments and private equity interests in hospitals

BILL NUMBER:S2946A

Title of bill

An act to amend the public health law, in relation to authorizing the establishment of private equity hospitals

Purpose

Directs the commissioner of health to establish a demon- stration program authorizing private capital investments and private equity interests in hospitals.

Summary of provisions

Section one amends Public Health Law § 2801-a to require the commission- er of health to establish, on or before March 1, 2015, a program whereby the Department of Health (DOH) may accept applications for demonstration projects around the state to develop, evaluate and implement a flexible approach allowing private capital investments and private equity inter- ests in hospitals. This section also sets forth criteria which appli- cants must demonstrate in order to be eligible for the program. All demonstrations approved by the commissioner must provide detailed annual reports.

Section two provides that this act shall take effect immediately.

Justification

Many health care facilities in New York State suffer from inadequate investment for capital improvements, upgrades and expan- sion. Private equity is a source of such funding in many sectors, but in New York's health care sector, such investing is limited. By statute, ownership is limited to individuals who are subject to character and competence reviews. This bill provides, on a demonstration basis, the ability for a limited liability corporation investing and hold an equity interest in a hospital. This would not be the first venture into private ownership of health care facilities for New York. Several years ago certain diagnostic and treatment centers, which provide dialysis services, were granted an exception due to the severe shortage of service providers. That exemption has proven successful in assuring access to quality services. The instant legislation is designed to build on that success and provide similarly needing capital to hospitals.

Legislative history

2012: S.7354 Died in Health

Fiscal implications

None.

Effective date

Immediately.