Three federal agencies launched an inquiry on Tuesday to assess private equity’s impact on healthcare.
The Federal Trade Commission, Department of Justice, and Health and Human Services also want to learn more about other corporations’ “increasing control” of the field. They note that PE and other firms are involved in a growing number of transactions, which can lead to owners “maximizing profits at the expense of quality care.”
The FTC has issued a request for information, asking the public to share feedback on M&A executed by health systems, payers, private equity funds and other alternative asset managers. It’s also seeking info on transactions that would not be reported to the feds for antitrust review.
“When private equity firms buy out healthcare facilities only to slash staffing and cut quality, patients lose out,” FTC Chair Lina M. Khan said in a March 5 statement. “Through this inquiry the FTC will continue scrutinizing private equity roll-ups, strip-and-flip tactics, and other financial plays that can enrich executives but leave the American public worse off.”
Tuesday’s request for information stems from a December 2023 announcement of the administration’s intent to probe “corporate greed in healthcare.” The public will have 60 days to submit comments at regulations.gov, no later than May 6.
Khan previously spoke about her agency’s intent to scrutinize PE back in October, after the FTC sued Welsh, Carson, Anderson & Stowe, claiming it was building a monopoly in anesthesia. Radiology has seen an uptick in PE interest, according to a study published Monday. Private equity-supported groups in the specialty include Premier Radiology Services, LucidHealth, Radiology Partners, Rayus Radiology, US Radiology Specialists, SimonMed, Solis Mammography and Capitol Imaging.
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.