New Mexico is the most vulnerable U.S. state in terms of susceptibility to predatory investment practices. That’s one of the conclusions of a report released this morning by the Joint Economic Committee, which is chaired by New Mexico senator Martin Heinrich.
New Mexico was ranked the state most threatened by the negative impacts of private equity firms, mainly due to the role those companies play in the state’s healthcare system.
About 25 percent of hospitals and about 35 percent of nursing homes in the state are private equity-controlled. Those numbers were supplied to Heinrich’s committee by the Private Equity Risk Index.
Heinrich acknowledges that private equity can have a positive impact but says it can also lower both the quality of healthcare and workers' wages.
“While private equity can be an important tool for struggling businesses, harmful practices by unregulated private equity firms can shut workers out of good-paying jobs and even threaten the health of New Mexicans. That needs to end,” said Senator Heinrich. “I will keep working to end the predatory practices that put New Mexicans at risk.”
The report also indicates that New Mexico is among the top ten states for the number of layoffs at private equity—controlled companies as a share of the state’s total private sector workforce.
The Private Equity Risk Index Report suggests several policy approaches to tackling the problems of potential exploitation, including a requirement that health care mergers go through public notice and review and an approval process. It also recommends that medical debt collection be regulated.
