The Federal Trade Commission (FTC) is gaining recognition for their aggressive enforcement stance on competitive business practices within the U.S. health care sector. The FTC’s latest lawsuit against U.S. Anesthesia Partners, Inc. (USAP) and its private equity sponsor, Welsh, Carson, Anderson & Stowe, is a key example of such ongoing assertiveness.
Filed on Sept. 21, 2023, the lawsuit accuses USAP and Welsh, Carson, Anderson & Stowe of orchestrating a “multi-year anticompetitive scheme” intended to consolidate anesthesiology practices throughout Texas. According to the FTC, this approach to dealmaking has resulted in monopolization of the anesthesiology market within the state. The implications of this action could impact the landscape of health care dealmaking across the United States.
The FTC argues that the firms’ strategy involved a “rolling up” process, essentially amalgamating smaller entities within the market into USAP to create a monopoly within the service domain of anesthesiology. This behavior, the FTC suggests, is inherently anticompetitive, undermining the fundamental principles of a free market.
For legal professionals operating within the health care space, this represents an important signal from the FTC regarding their intolerance towards anticompetitive behavior. Corporations and law firms should heed these actions and adjust their dealmaking strategies accordingly to mitigate risk of potential FTC enforcement.
While the suit is directly against USAP and Welsh, Carson, Anderson & Stowe, the FTC’s intensifying scrutiny will undoubtedly reverberate through the health care industry more broadly. Legal professionals will likely need to adapt and refine their understanding of acceptable consolidating practices within the industry to proactively address any potential concerns raised by the FTC. Should the FTC’s stance remain consistent, astute legal professionals can expect an increased need to scrutinize the competitive implications of their clients’ dealmaking strategies.