Oregon Bill to Block Private Equity Medical Deals Heads to Governor's Desk

Healthcare Transactions attorney John Saran was interviewed by The Wall Street Journal about a bill passed by the Oregon state legislature that would prohibit non-physician investors from controlling medical practices. Although Oregon already has a decades-old ban on the corporate practice of medicine, proponents say the bill would close loopholes that have allowed corporations to use medical support businesses or paper owners to acquire and control medical practices. If signed by Gov. Tina Kotek, the law would represent the country's strictest prohibition on corporate actors in the industry, joining several other states that have enacted similar legislation to regulate private equity in healthcare. Mr. Saran explained how the sector will have to respond if the bill becomes a law, saying private equity firms will need to review their holdings and revise their approach to healthcare mergers and acquisitions (M&A) transactions, as the typical structures used will no longer be valid.

"[Investors] will have to adapt, because the standard structure you see all across the country will have to be modified because of these restrictions," he said.

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