Connecticut Senate passed Senate Bill 196 to bar private equity firms from acquiring or increasing control over hospitals beginning October 2026
Hospitals will be required to annually certify to the Department of Public Health that private equity does not hold controlling interest or interfere with clinical decisions
Bill responds to Prospect Medical Holdings’ mismanagement of three Connecticut hospitals which ProPublica linked to at least two deaths and led to Prospect’s 2025 bankruptcy
Private equity’s presence in Connecticut health care would be limited under a bill advanced this week by legislative Democrats in a response to private ownership issues that have negatively impacted care at several hospitals in the state.
“This legislation will take action to counter past mistakes,” said State Senator Saud Anwar. “These measures will help prevent the damage our state experienced in the past from bad-faith health care ownership.”
Senate Bill 196, which passed the state Senate on April 22, takes two key steps to limit private equity presence in Connecticut healthcare. First, after October 1, 2026, hospitals will be barred from acquiring or increasing operational control over a hospital.
Beginning in early 2027, hospitals would be required to attest each year to the Department of Public Health that private equity does not have controlling interest in operations or influence a hospital’s adoption of policies interfering with clinicians’ judgment or decisions.
Second, sale-leaseback transactions of a hospital’s main campus, where a property’s owner sells the land the hospital is located on and leases it back from the organization purchasing it, will be barred beginning October 1, 2026.
“Connecticut came dangerously close to watching a rogue private equity firm, only interested in control of the board and stripping hospitals of their assets, sacrifice the quality of care from hospitals that our communities depend on,” said Senate President Martin M. Looney and Senate Majority Leader Bob Duff. “Profits-over-people is not a health care policy — it is a predatory model, and it has no place in our state’s hospitals.”
In Connecticut, Prospect Medical Holdings, Inc. purchased three hospitals – Manchester Memorial Hospital, Rockville General Hospital and Waterbury Hospital – in the mid-2010s. A culture of mismanagement and focus on financial gain and profit followed, with the hospitals’ land being sold and leased back and hospitals continually reporting problems, according to ProPublica. At least two deaths and one case of brain damage were connected to conditions in those hospitals, the news source said.
Prospect declared bankruptcy in 2025, with UConn Health purchasing Waterbury Hospital and Hartford HealthCare purchasing Manchester and Waterbury hospitals.
By Joe O’Leary
