Lawmakers urge feds to closely scrutinize UnitedHealth Group acquisition of multistate radiology provider
Lawmakers are urging the Biden administration to closely scrutinize UnitedHealth Group’s proposed acquisition of a multistate provider of radiology and other specialty services.
UHG’s Optum subsidiary recently revealed its intent to buy Dallas-based Steward Medical Group, which spans nine states and 450 practices, employing 1,700 providers. Both U.S. senators, and the entire Massachusetts delegation, on Monday asked the Federal Trade Commission and Department of Justice to carefully consider the ramifications of the deal.
UHG already owns UnitedHealthcare, the largest commercial health plan in the country, and its OptumCare is the biggest employer of physicians—with a workforce of 90,000 and counting. In 2023, UnitedHealth reported over $22 billion in profit, “making it the largest and most profitable healthcare conglomerate in the United States.”
“This stranglehold over U.S. physicians harms patients and doctors,” Democratic Sens. Elizabeth Warren, Edward J. Markey and colleagues wrote April 5. “By leveraging its massive market power, UnitedHealth can force doctors to limit networks, cut services and see more patients per day to pad its profits, lowering the quality care of the more than 20 million patients that see Optum physicians.”
Part of the larger Steward Health Care hospital system, the medical group’s coordinated model is centered around primary care, with Steward also providing diagnostic imaging services and employing over 180 radiologists. Steward Medical Group’s practices span Arizona, Arkansas, Florida, Louisiana, Massachusetts, New Hampshire, Ohio, Pennsylvania, Rhode Island and Texas. The company dates to 2010, when private equity firm Cerberus Capital Management acquired the struggling nonprofit Caritas Christi Health Care system. Steward fueled national expansion since 2016 via debt and executed a series of lease-back deals with landlord Medical Properties Trust. Cerberus exited ownership in 2020 but its accumulated debts have left the organization in a precarious position.
Markey and Warren are concerned about the fate of nine Massachusetts hospitals owned by Steward. Some are in underserved communities and their closure would have a “devastating impact” across eastern Massachusetts.
“Steward’s threat to close hospitals should not prevent DOJ and FTC from conducting a close and careful review of the proposed UnitedHealth acquisition,” the lawmakers wrote in their letter to the two agency leaders. “We are committed to ensuring Steward’s hospitals remain open for the communities they serve. This proposed merger, however, does not guarantee they will stay open in the long-run, and in the meantime could lead to more expensive healthcare for vulnerable patients and create more opportunities for UnitedHealth to pad its profits with taxpayer dollars.”
Lawmakers noted that Steward has sought a sale of its medical group as it faces a “deep cash crunch.” This results from ongoing “mismanagement” by company executives and “massive debts” imposed by former private equity owners at Cerberus. As a result, Steward has been left unable to pay vendors and is “deep in debt,” Warren and Markey wrote.
The letter writers also commended the FTC and Chair Lina Khan for suing private equity firm Welsh, Carson, Anderson & Stowe and US Anesthesia Partners for allegedly working to build a monopoly in the specialty.
“Given the potential anticompetitive impacts of UnitedHealth’ acquisition of Stewardship health, we urge you to closely scrutinize this acquisition and oppose it if it would drive up healthcare costs or reduce patients’ quality of care in violation of antitrust law,” they concluded.
You can read more about their concerns in this April 8 announcement from Warren’s office. The two Massachusetts lawmakers also hosted a hearing about “corporate greed” in healthcare on April 3.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.