According to an April 2022 study published in JAMA, anesthesia prices increased an average of 26% when anesthesia companies, backed by private-equity investors, took over HOPDs or ASCs, compared with independent practices. About 20% of anesthesia practices made up private equity physician practice buyouts, according to the study, and about 33% of anesthesiologists were acquired by private equity physician practice buyouts.
More recently, private equity activity in anesthesia has attracted greater government scrutiny. For example, on Jan. 17 the Federal Trade Commission reached a settlement with Welsh, Carson, Anderson and Stowe, the private equity firm backing U.S. Anesthesia Partners.
The FTC first sued USAP and its WCAS in 2023, alleging the two groups executed a multiyear anticompetitive scheme to consolidate anesthesiology practices in Texas, hike the price of services provided to Texas patients and increase their own profits. USAP sought to dismiss the lawsuit in August 2024. Shortly thereafter, The 5th U.S. Circuit Court of Appeals in New Orleans ruled that it would not take up USAP’s appeal to block the antitrust lawsuit and would not dismiss its private equity creator.
As a part of the settlement, WCAS will abide by a consent order in which it will be required to limit its involvement with USAP and notify the FTC of specified future acquisitions and investments in anesthesia and other hospital-based physician practices.
The settlement comes at both a time of transition at the FTC and increased state-level scrutiny of private equity transactions in healthcare. On Jan. 8, Massachusetts Gov. Maura Healey signed a bill into law that will increase state oversight of healthcare transactions. The law specifically aims to increase state scrutiny of private equity sponsors, significant equity investors, healthcare real estate investment trusts, management services organizations and pharmacy benefits companies.
California, Indiana, Minnesota, New Mexico and Oregon have also been weighing or have already passed legislation that will increase scrutiny over healthcare mergers and acquisitions.