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FTC sues anesthesia providers in Texas over market monopoly
https://www.whatjobs.com/news/usa/us-business-news/ftc-sues-anesthesia-providers-in-texas-over-market-monopoly
By Nithya Bose in US business news, posted September 24, 2023
The Federal Trade Commission has filed an antitrust lawsuit against a private-equity-backed doctors' group that operates anesthesia practices in multiple states.
It’s considered a significant step in its commitment to address consolidation in the healthcare industry.
This suit challenges the growing trend of private equity firms supporting medical practice aggregators that dominate local healthcare markets.
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It allegedly led to higher prices and increased profits at the expense of patients and businesses.
The lawsuit names US Anesthesia Partners and the private-equity firm Welsh, Carson, Anderson & Stowe, based in New York, as defendants.
The FTC accuses them of using serial acquisitions to increase anesthesia service prices.
It enriches their executives while harming Texas patients and businesses.
Private equity's involvement in healthcare has become increasingly common.
It allows companies to acquire numerous doctors' practices across various medical specialties and gain control over local healthcare markets.
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The lawsuit is unusual in that it targets both the private equity investor and the company itself, where the investor now holds a minority stake.
The FTC has declared this type of healthcare merger an enforcement priority.
The agency suggests more cases like this may follow to scrutinize the growth of private equity in the industry.
Private equity firms have argued that their practices do not violate federal antitrust laws.
The lawsuit alleges that Welsh Carson and US Anesthesia Partners aimed to expand their presence in Texas.
They intended to raise payments for doctors and nurses from insurers by increasing market share.
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The suit cites statements from Brian Regan, head of Welsh Carson's healthcare group, and an executive from an acquired practice in Austin, Texas.
They expressed intentions to consolidate high-market-share practices and improve negotiating leverage with insurers.
Furthermore, the lawsuit accuses US Anesthesia Partners of conspiring with another large anesthesia company in Texas.
However, the latter's name was redacted in the legal filing.
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While Welsh Carson and US Anesthesia Partners dispute the FTC's claims, they have committed to fighting the lawsuit.
They assert it is based on flawed legal theories and a lack of understanding of anesthesia practices.
They argue that their commercial prices in Texas have increased modestly over the years, remaining flat when adjusted for inflation.
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