F.T.C. Sues Anesthesia Group backed by private equity firm

Federal agency says company's practices constitute antitrust activity, a new salvo in government scrutiny of corporate consolidation health care that led to higher prices.

After pledging to fight consolidation in the health care industry, the Federal Trade Commission filed Thursday filed an antitrust complaint challenging the growing practice of private equity firms backing companies that combine medical practices. and dominate local markets.

The lawsuit targeted a large group of doctors that operates anesthesia practices in several states, claiming that the group and the capital company- investment which advised and financed it were in the process of consolidating. physician groups in Texas so they can raise prices and increase profits.

The agency filed a civil suit in federal court against U.S. Anesthesia Partners and Welsh, Carson, Anderson & Stowe, a New York private equity firm.

“These tactics allowed USAP and Welsh Carson to increase prices for anesthesia services, thereby reaping tens of millions of additional dollars for these executives at the expense of Texas patients and businesses,” Lina M. Kahn, chairwoman of the F.T.C., said in a statement. “The F.T.C. will continue to examine and challenge serial acquisitions, consolidations and other stealth consolidation plans that illegally undermine fair competition and harm the American public. focuses on a business strategy increasingly common in the healthcare industry. Private equity firms have helped companies buy more medical practices in various medical specialties, and these purchases have allowed them to control a significant share of some local markets.

The lawsuit is also unusual because it was also filed against the private equity investor, who now owns a minority stake in U.S. Anesthesia Partners, and not just the company.

A recent study Researchers at the Petris Center at the University of California at Berkeley and the Washington Center for Equitable Growth, a progressive think tank in Washington, found that private equity-financed consolidation led to an increase in prices in the fields of gastroenterology, dermatology and other medical specialties.

The F.T.C. said it views this type of health care merger as an enforcement priority, a sign that this case could be the first of many scrutinizing the growth of private equity in the sector. The companies argued that their activities did not violate federal antitrust law.

The suit argues that Welsh Carson and U.S. Anesthesia Partners expanded their reach across Texas With the explicit goal of using its market share to raise prices, its doctors and nurses would be paid by insurers.

Brian Regan, head of the health care group of Welsh Carson who served on the board of directors of U.S. Anesthesia Partners, was cited in the lawsuit as telling lenders financing a key deal that the company planned to "build a nationwide platform by consolidating practices with a high market share in a few key markets” and to improve “negotiating leverage” with insurers. .

After learning about the strategy, an executive at a practice the company purchased in Austin, Texas, responded, “Great! Cha-ching," according to the lawsuit.

The lawsuit also accused U.S. Anesthesia Partners of conspiring with another major anesthesiologist...