Brooklyn Journal of Corporate, Financial & Commercial Law

First Page



Health care expenditures have grown substantially in recent years, captivating the attention—and investments—of private equity firms. While funding appears attractive to health care institutions, the conflicting priorities of hospitals and firms regarding patient outcomes and monetary gain lead to detrimental impacts on the quality, access, and cost of patient care. These effects highlight the current deficit of federal and state regulation targeting private equity involvement in health care. Recently, states have responded to this absence of legislation by enacting or proposing new laws to govern material health care transactions. In May 2023, New York followed the trend, ratifying Article 45-A of the Public Health Law (Article 45-A) to achieve this very purpose. Although Article 45-A is likely to increase the transparency of transactions due to its notice requirement, it does not empower the state to prevent harmful transactions. Thus, the law is unlikely to improve the quality, access, or cost of patient care. This Note argues that Article 45-A should be amended to include an approval requirement, allowing regulators to block suspicious transactions from closing. Furthermore, this Note suggests that the amended law implements a review process to weigh specific factors and assess public commentary to determine whether anticipated impacts of a transaction should prevent its approval. Lastly, this Note proposes that the amended law requires notice of plans for maintaining appropriate health care staffing volumes and debt repayment to mitigate the adverse effects of private equity on patient health outcomes.