Magnus
Diamond Member
- Jun 22, 2020
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After vowing to tackle consolidation in the health care industry, the Federal Trade Commission filed an antitrust lawsuit on Thursday that challenged the growing practice of private-equity firms backing companies that amass medical practices and dominate local markets.
The suit targeted a large doctors’ group that operates anesthesia practices in several states, claiming the group and the private equity firm advising and financing it were consolidating doctors’ groups in Texas so they could raise prices and increase their profits.
The agency brought the civil lawsuit in federal court against U.S. Anesthesia Partners and Welsh, Carson, Anderson & Stowe, a private-equity firm in New York.
“These tactics enabled USAP and Welsh Carson to raise prices for anesthesia services — raking in tens of millions of extra dollars for these executives at the expense of Texas patients and businesses,” said Lina M. Kahn, the chair of the F.T.C., in a statement. “The F.T.C. will continue to scrutinize and challenge serial acquisitions, roll-ups and other stealth consolidation schemes that unlawfully undermine fair competition and harm the American public.”
A recent study from researchers at the Petris Center at the University of California, Berkeley, and the Washington Center for Equitable Growth, a progressive think tank in Washington, found that private equity-funded consolidation had led to price increases in gastroenterology, dermatology and other medical specialties.
The F.T.C. has said it considers this type of health care merger to be an enforcement priority, a sign that this case may be the first of several scrutinizing the growth of private equity in the industry. The firms have argued that their businesses do not violate federal antitrust law.
The suit argues that Welsh Carson and U.S. Anesthesia Partners have expanded their reach across Texas with an explicit goal of using market share to raise prices its doctors and nurses would be paid by insurers.
Brian Regan, the head of Welsh Carson’s health care group who sat on the board of U.S. Anesthesia Partners, was quoted in the lawsuit as telling lenders who were financing a key deal that the firm planned to “build a platform with national scale by consolidating practices with high market share in a few key markets” and to improve “negotiating leverage” with insurers.
After learning of the strategy, an executive in a practice the firm bought in Austin, Texas, responded, “Awesome! Cha-ching,” according to the suit.
www.nytimes.com
I wonder if Republicans in Texas understand and appreciate what Biden is doing for them and their wallets. A NY firm consolidating healthcare providers solely to jack up prices for the common man in Texas. I somehow doubt it.
The suit targeted a large doctors’ group that operates anesthesia practices in several states, claiming the group and the private equity firm advising and financing it were consolidating doctors’ groups in Texas so they could raise prices and increase their profits.
The agency brought the civil lawsuit in federal court against U.S. Anesthesia Partners and Welsh, Carson, Anderson & Stowe, a private-equity firm in New York.
“These tactics enabled USAP and Welsh Carson to raise prices for anesthesia services — raking in tens of millions of extra dollars for these executives at the expense of Texas patients and businesses,” said Lina M. Kahn, the chair of the F.T.C., in a statement. “The F.T.C. will continue to scrutinize and challenge serial acquisitions, roll-ups and other stealth consolidation schemes that unlawfully undermine fair competition and harm the American public.”
A recent study from researchers at the Petris Center at the University of California, Berkeley, and the Washington Center for Equitable Growth, a progressive think tank in Washington, found that private equity-funded consolidation had led to price increases in gastroenterology, dermatology and other medical specialties.
The F.T.C. has said it considers this type of health care merger to be an enforcement priority, a sign that this case may be the first of several scrutinizing the growth of private equity in the industry. The firms have argued that their businesses do not violate federal antitrust law.
The suit argues that Welsh Carson and U.S. Anesthesia Partners have expanded their reach across Texas with an explicit goal of using market share to raise prices its doctors and nurses would be paid by insurers.
Brian Regan, the head of Welsh Carson’s health care group who sat on the board of U.S. Anesthesia Partners, was quoted in the lawsuit as telling lenders who were financing a key deal that the firm planned to “build a platform with national scale by consolidating practices with high market share in a few key markets” and to improve “negotiating leverage” with insurers.
After learning of the strategy, an executive in a practice the firm bought in Austin, Texas, responded, “Awesome! Cha-ching,” according to the suit.
F.T.C. Sues Anesthesia Group Backed by Private-Equity Firm
The federal agency claims the company’s practices amount to antitrust activity, a new salvo in the government’s scrutiny of health care consolidation that has led to higher prices.
I wonder if Republicans in Texas understand and appreciate what Biden is doing for them and their wallets. A NY firm consolidating healthcare providers solely to jack up prices for the common man in Texas. I somehow doubt it.
