- The Federal Trade Commission sued the largest anesthesiology provider in Texas, alleging the company exercised monopoly power to drive up prices for patients and boost its profits.
- The FTC asked a federal judge in Houston, Texas, to break up US Anesthesia Partners’ alleged monopoly power and permanently ban the company from engaging in anticompetitive practices.
- The agency alleges that New York-based private equity firm Welsh, Carson and Stowe formed US Anesthesia Partners in 2012 to pursue an aggressive consolidation strategy that took advantage of the fragmented market for anesthesiology providers in Texas.
- According to the allegations, the companies used this monopoly power to raise prices, rake in tens of millions of dollars more and increase their profits.
Federal Trade Commission (FTC) Chairwoman Lina Khan testifies before a House Judiciary Committee hearing on “Oversight of the Federal Trade Commission” on Capitol Hill in Washington, July 13, 2023.
Kevin Worm | Portal
The Federal Trade Commission sued the largest anesthesiology provider in Texas on Thursday, alleging the company exercised monopoly power to drive up prices for patients and boost its profits.
The FTC asked a federal judge in Houston, Texas, to break up US Anesthesia Partners’ alleged monopoly power and permanently ban the company from engaging in anticompetitive practices.
The agency alleges that New York-based private equity firm Welsh, Carson and Stowe formed US Anesthesia Partners in 2012 to pursue an aggressive consolidation strategy that took advantage of the fragmented market for anesthesiology providers in Texas.
The FTC complaint alleges that Welsh Carson attempted to make USAP the dominant provider in Texas by absorbing the numerous independent practices that previously competed with each other and thereby keeping prices lower.
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Welsh Carson and USAP engaged in a so-called “roll-up,” purchasing nearly every major anesthesia practice in Texas, the complaint says.
Since 2013, USAP has grown from 400 anesthesia providers in 45 healthcare facilities to 4,500 providers in 1,100 facilities in 2021.
According to the lawsuit, USAP has established monopoly power in Houston and Dallas, the two largest cities in Texas, and a dominant position in Austin, the state capital.
The company exploited its dominance to raise prices, raking in tens of millions of dollars in the process, the FTC alleges.
USAP is so powerful in Austin, Dallas and Houston that it can raise prices while gaining market share because it is difficult for competitors to enter the market and patients typically cannot forego anesthesia, the report said Complaint.
Dr. USAP board member Derek Schoppa told CNBC that the FTC’s complaint is based on flawed legal theories and a lack of medical understanding of anesthesiology.
“The FTC’s intended outcome threatens to disrupt and limit patients’ equitable access to quality anesthesia care in Texas and will negatively impact Texas hospitals and health systems that serve underserved communities,” Schoppa said in a statement.