Radiology-affiliated private equity firm buys up medical practices, raises prices
A prominent report from the Washington Post details how one radiology-affiliated private equity firm bought up medical practices and then subsequently raised prices.
New York-based Welsh, Carson, Anderson & Stowe took “less than a year” to create Colorado’s largest anesthesiology group “from scratch.” US Anesthesia Partners did so by buying the largest such specialty group in the Denver area in 2015, and then acquiring the next biggest after that.
It eventually accumulated more than 330 anesthesiologists on its roster, signing contracts with 10 of the region’s 15 largest hospitals.
“The company became big enough to influence pricing and raised prices because it could,” Matt Bigalk, who worked as director of operations at USAP’s Colorado branch from 2015 to 2017 and previously handled negotiations with insurers for one of the merged firms, told the Post.
Prices for some services climbed by almost 30% in the first year, the report claimed. Anesthesiologists reportedly became so disheartened that 1 in 3 left during a three-year period. Prices rose so high at one point in 2020 that UnitedHealth terminated its contract with the practice (though the parties later reached a deal).
Welsh, Carson, Anderson & Stowe has similarly backed US Radiology Specialists, which is based in Raleigh, North Carolina. Charlotte Radiology and WCAS formed the imaging group in 2018, growing it through acquisitions in the five years that followed. Transactions included USRS taking on $450 million in debt to fuel the company’s largest acquisition as of February 2022—buying two New Jersey imaging groups.
The Washington Post report did not offer details on US Radiology Specialists or how the practice has impacted prices in the specialty. US Anesthesia Partners denied that it has built a monopoly in the Centennial State.
“USAP faces significant competition in Colorado, from a variety of groups and healthcare organizations,” CEO Robert Coward said in a statement to the Post. “USAP’s average annual net rate increases from major insurers in Colorado are modest and in line with national benchmarks.”
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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.