News Release: FTC Takes Action Against Private Equity-Driven Texas Anesthesiology Monopoly


Sept. 26, 2023

Carter Dougherty

 FTC Takes Action Against Private Equity-Driven Texas Anesthesiology Monopoly

Washington, D.C. – The Federal Trade Commission’s recent action against private equity abuse in the healthcare industry is an important step in protecting patients and fostering competition in anesthesiology practices.

“Private equity firms have long used roll-ups as a way to create market dominance in a local or regional market,” said Ricardo Valadez, private equity campaign manager at Americans for Financial Reform Education Fund. “As we see in this case, the resulting market power is often abused, harming consumers who are left with fewer options and higher prices.” 

Earlier this month, the FTC filed a lawsuit against U.S. Anesthesia Partners, Inc. (USAP), the dominant anesthesia provider in Texas, and their private equity owners, Welsh, Carson, Anderson & Stowe. The complaint notes private equity’s role in the anti-competitive practices, such as acquiring numerous small anesthesiology practices to create a single, dominant company. The suit also alleges additional anti-competitive actions, including price-setting and market allocation agreements inflating service costs and increasing patients’ prices. 

Private equity firms own or back 18,000 US companies, quadruple the number of publicly traded companies. This suit challenges their ability to create unfair market advantages using roll-ups, which typically fall below the FTC’s review threshold. 

“While these practices are harmful in any industry, they are especially pernicious in healthcare and other instances, where patients often do not have an opportunity to shop around,” said Valadez. “If you go to a medical facility for a procedure, you will likely have to work with the anesthesiologist used by that practice. You’re at the mercy of the specialty provider when it comes to price.” 

There are other notable examples of private-equity owned medical care providers often using market concentration to engage in price gouging. After private equity firms KKR and Blackstone bought up physician staffing agencies into Envision and Team Health (respectively), they charged hospital patients exorbitant out-of-network charges to patients for specialty and air ambulance services, leading to the passage of the No Surprises Act to curb the practice. Private equity firms have also consolidated hundreds of home health care agencies into what are now three dozen firms, raising concerns about competition, affordability, and quality of care in the home care sector.

In July 2023, AFR released a pair of reports examining the role of private equity in healthcare. The reports survey the ample academic research detailing private equity’s deleterious impacts in a range of healthcare settings, conclude that private equity is incompatible with quality healthcare due to its short-term holding strategy that puts profits ahead of providing care to patients.