The Federal Trade Commission wants to hear from physicians about their healthcare experiences with private equity, Chair Lina M. Khan said during recent remarks.
She spoke via video as part of the closing keynote at the American College of Emergency Physicians’ annual meeting in Philadelphia. Khan highlighted recent FTC proposals to ban noncompete clauses and increase scrutiny around merger deals linked to private investment firms.
“It’s really easy for folks in D.C. to kind of have blind spots and kind of lose touch with the realities of how people in their everyday lives are experiencing monopoly power,” she told attendees on Oct. 11, according to an ACEP recap of the session. “We always want to be hearing from you all, understanding how an antitrust and consumer protection could be applied in healthcare to make these markets work better for everybody. Your patients and your communities deserve the type of committed knowledgeable care that you've dedicated your lives to providing, and you all deserve the economic freedom and the liberty that the antitrust laws are designed to protect.”
Vertical and horizontal integration are occurring across various industries. But the FTC is “especially focused” on understanding the negative impact of consolidation in healthcare. Asked during the Q&A portion of the session what can be done to push back against private equity, Khan said the FTC is working to update the Hart-Scott-Rodino Act form and modify other processes so the agency is alerted about PE acquisitions that fall under a $100 million threshold.
“We just put forward what’s called our ‘revised HSR form’ … It basically means when companies are merging—or are looking to merge and have to report it to us—that we're going to increasingly require them to list their history of acquisition,” she told attendees. “So, we’ll have more understanding—is this a serial acquire? Is this a private equity firm that’s looking to roll up a market in ways that may harm competition? And then we can act on the front end rather than years later, when the harm’s already been done.”
The FTC also recently filed suit against US Anesthesia Partners and its investment partner, Welsh, Carson, Anderson & Stowe. Regulators claimed last month that the New York-based private equity firm created the physician group to execute a strategy of consolidating and monopolizing the specialty market in Texas. The suit also alleged that Welsh Carson is attempting to do the same in radiology (though US Radiology Specialists is not named in the complaint). For their part, both USAP and Welsh Carson have denied the allegations.
There’s been an uptick in the number of radiologists and other specialists moving under private equity ownership, a trend that warrants further investigation, according to a 2020 JAMA analysis. The number of radiology-dedicated practices in this tally was low. However, investigators did find a notable number of imaging physicians in multispecialty groups moving under an investor umbrella, from just four radiologists in 2013, up to 159 in 2015. Anesthesiology (19%), multispecialty (19%), emergency medicine (12%), family practice (11%), and dermatology (10%) represented the most commonly acquired medical groups. Radiology, cardiology, ophthalmology and obstetrics/gynecology also saw increases in private equity activity during the study period.
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.
Khan said that hearing from physicians in emergency medicine and other specialties is essential as the FTC works to better understand these trends in healthcare.
“It's just difficult to overstate how valuable your stories, your experiences, are for us,” she told attendees. “We've just benefited so much from hearing from your comments on our proposed merger guidelines and your comments on our proposed proposal to ban noncompetes. Your voices are just essential for us.”
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.