The Federal Trade Commission (FTC) has filed a civil lawsuit against U.S. Anesthesia Partners and the private equity firm Welsh, Carson, Anderson & Stowe, alleging monopolistic practices in the anesthesiology market. This lawsuit marks a significant move by the FTC to address concerns over private equity acquisitions in healthcare, particularly those involving physician groups.
Key Points of the Lawsuit:
Allegations of Monopolistic Practices: The FTC accuses U.S. Anesthesia Partners and Welsh Carson of engaging in anti-competitive schemes to gain market power and drive up prices for hospital anesthesiology services. The lawsuit claims they established deals with competing groups to raise prices and avoid market competition.
Market Impact: U.S. Anesthesia Partners, established in 2012 and expanded to eight states, now controls 60% of Texas’ hospital anesthesia market. Their prices are reportedly double the median rates of other providers in the state.
FTC’s Stance: FTC Chair Lina Khan, appointed by President Joe Biden, confirms that the lawsuit is intended to send a message against roll-up schemes in healthcare. The FTC aims to scrutinize such acquisitions more closely, focusing on where significant harm is observed.
- Rising Concerns: The increasing volume of private equity acquisitions of physician groups has raised concerns about health costs, quality of care, and clinical autonomy. Studies have shown that prices charged by groups increase significantly post-acquisition by private equity firms.
- FTC’s Strategy: The FTC is looking to apply more scrutiny to these acquisitions, considering the cumulative effect of a series of smaller acquisitions that could lead to excessive market power and higher prices.
- Challenges and Criticisms: While the FTC’s actions are seen as a step towards addressing market consolidation, some argue that it may be too late, as consolidation has already reduced competition significantly. Critics also warn that private equity roll-ups can jeopardize the quality of care.
The lawsuit represents a critical effort by the FTC to regulate the growing influence of private equity in healthcare, aiming to protect consumer interests and maintain competitive market dynamics.