F.T.C. sues private equity firm and anesthesia group for allegedly creating a monopoly

“The Federal Trade Commission has sued U.S. Anesthesia Partners and its private equity owner, Welsh, Carson, Anderson & Stowe, alleging in federal court the two partners formed a monopoly in order to drive up prices and boost their profits,” Bob Herman and Tara Bannow write over at Stat News. “Normally, the F.T.C. sues the company that it believes has violated antitrust law. But this lawsuit is novel by also going after a private equity sponsor that it believes hatched the entire alleged scheme — and could serve as a warning to other private equity deals, which have flooded the health care industry. U.S.A.P. has been in the crosshairs of federal antitrust officials since last fall. STAT reported last year how U.S. Anesthesia Partners bought competing doctor groups in its markets to gain leverage over commercial health insurers and paid shareholders large sums by saddling the company with billions of dollars of debt. The Washington Post reported in July that the company has used its growing market power to command higher prices. Welsh Carson created U.S.A.P. in 2012. The lawsuit says the New York-based private equity firm envisioned a roll-up strategy whereby it would consolidate Texas’ small, competing anesthesiology practices in large metropolitan areas. In doing so, Welsh Carson was able to eliminate competition in each market and raise prices with each acquisition. Since its formation, U.S.A.P. has acquired more than a dozen practices in Texas. The anesthesia group’s prices ‘now dwarf those of its rivals,’ according to the F.T.C..” Bob Herman and Tara Bannow, “F.T.C. sues private equity firm Welsh Carson, U.S. Anesthesia Partners for allegedly creating a monopoly,” Stat News.