Federal Trade Commission Chair Lina Khan testifies before a House Judiciary Committee hearing on Oversight of the Federal Trade Commission, on Capitol Hill in Washington, D.C., July 13, 2023.
Kevin Wurm | Reuters
The Federal Trade Commission on Thursday sued the most important anesthesiology provider in Texas, claiming the corporate has wielded monopoly power to drive up prices for patients and boost its profits.
The FTC asked a federal judge in Houston, Texas, to break up U.S. Anesthesia Partners’ alleged monopoly power and permanently bar the corporate from engaging in anti-competitive practices.
The agency claims that Recent York-based private equity firm Welsh, Carson, Anderson & Stowe founded U.S. Anesthesia Partners in 2012 to pursue an aggressive consolidation strategy that exploited Texas’ fragmented marketplace for anesthesiology providers.
The FTC criticism says that Welsh Carson sought to make USAP the dominant provider in Texas by hoovering up the many independent practices that previously competed against each other, keeping prices lower.
Welsh Carson and USAP engaged in what the businesses called a “roll-up,” buying nearly every large anesthesia practice in Texas, according to the criticism.
Since 2013, USAP has grown from 400 anesthesia providers at 45 health-care facilities to 4,500 providers at 1,100 facilities in 2021.
USAP has established monopoly power in Houston and Dallas, the 2 largest cities in Texas, and a dominant position in Austin, the state’s capital, according to the criticism.
The corporate has used its dominance to raise prices, raking in tens of tens of millions of dollars, the FTC alleges.
USAP is so powerful in Austin, Dallas and Houston that it might probably raise prices while still gaining market share since it is difficult for competitors to enter the market, and patients typically cannot forgo anesthesia, according to the criticism.
Dr. Derek Schoppa, a USAP board member, told CNBC that the FTC’s criticism relies on flawed legal theories and a scarcity of medical understanding about anesthesiology.
“The FTC’s intended final result threatens to disrupt and restrict patients’ equitable access to quality anesthesia care in Texas and can negatively impact the Texas hospitals and health systems that provide care in underserved communities,” Schoppa said in a press release.