HHS, Justice, FTC launch target private equity investment in health care

Federal regulators want to hear about how private equity investment is affecting health care.

The U.S. Federal Trade Commission (FTC) and the U.S. Departments of Justice (DOJ) and Health and Human Services (HHS) announced “a cross-government public inquiry into private-equity and other corporations’ increasing control over health care.” The federal regulators are seeking information about patient health, worker safety, quality of care and affordability for patients and taxpayers.

“When private equity firms buy out health care facilities only to slash staffing and cut quality, patients lose out,” FTC Chair Lina M. Khan said in the news release. “Through this inquiry the FTC will continue scrutinizing private equity roll-ups, strip-and-flip tactics, and other financial plays that can enrich executives but leave the American public worse off.”

The federal regulators will accept public comments through May 6. A formal 12-page request for comments and an electronic comment portal are available online.

The announcement came the same day FTC planned an afternoon online forum titled “Private Capital, Public Impact: An FTC Workshop on Private Equity in Health Care.” The lineup of speakers included Khan, DOJ Assistant Attorney General for Antitrust Jonathan Kanter, HHS Inspector General Christi A. Grimm, and Medicare Principal Deputy Administrator and COO Jonathan Blum.

Competition is crucial for a number of reasons, the federal regulators said.

“Increasing competition in health care markets gives people more choices. Competition helps ensure patients have access to high-quality, lower cost care, and that health care workers receive higher pay and work under better conditions. And it saves taxpayers money,” HHS Secretary Xavier Becerra said in the news release. “We need to do more to understand the impact of private equity and corporate dealmaking on our policymaking, regulatory decisions and enforcement actions.”

He noted the administration of President Joe Biden is committed to improving transparency and competition in health care.

Meanwhile, HealthAffairs this week published a new study, “Private Equity-Acquired Physician Practices And Market Penetration Increased Substantially, 2012-21,” documenting the growth over a decade.

“PE-acquired physician practice sites increased from 816 across 119 MSAs in 2012 to 5,779 across 307 MSAs in 2021,” the study said. “Single PE firms had significant market share, exceeding 30 percent in 108 MSA specialty markets and exceeding 50 percent in 50 of those markets.”