A private equity-backed doctors’ group acquired Texas practices and drove up the price of its services, according to Federal Trade Commission.
A private equity-backed doctors’ group acquired Texas practices and drove up the price of its services, according to a Federal Trade Commission lawsuit.The FTC alleges that U.S. Anesthesia Partners has bought some of the largest anesthesia groups in the state. With this portfolio of practices, the group has raised prices for its services much higher than they originally were, according to the suit.
“There’s nothing unusual about what the private equity firm did,” Gupta said. “It’s the same modus operandi where the private equity firms roll up the physician practices, they increase their market power in the local market, and then they exploit that advantage in the negotiations with insurance.” Private equity firms first became interested in health care entities in the early 2000s, Gupta said. After the 2008 financial crisis, the trend cooled before resuming, and now private equity firms own hospitals, nursing homes, physicians groups and more.
This means that the prices a physicians group bills to an insurance company will increase. The cost paid by the patient usually increases as well, in the form of increased co-pays or deductibles.
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