On June 5, 2024, the Attorneys General of California, Connecticut, Delaware, Illinois, Minnesota, New Jersey, Oregon, Pennsylvania, Rhode Island, Washington, and Washington D.C. submitted a 29-page comment letter in response to the Request for Information on Consolidation in Healthcare Markets issued jointly by the U.S. Department of Justice Antitrust Division (DOJ), the Federal Trade Commission (FTC), and U.S. Department of Health and Human Services (HHS). In the letter, the attorneys general expressed their concern about the adverse effects of consolidation in healthcare markets, particularly through transactions driven by private equity.
In particular, antitrust enforcers have focused on private equity “roll-ups”, consolidation of multiple smaller providers into a larger provider network. Over the last 14 years, healthcare consolidation propelled by private equity has steadily increased; between 2010 and 2020, the estimated private equity deal values in healthcare totaled about $750 billion. Many of those transactions involved the acquisition of physician practices, hospices, nursing homes, hospitals, and behavioral healthcare facilities. In their letter, the attorneys general stated, without empirical evidence, that this consolidation has led to increased prices, decreased access and quality of care, and harm to patients and communities.
The attorneys general urged the DOJ, FTC, and HHS to “explore all avenues to prevent conduct by private equity in healthcare that harms patients, healthcare workers, and taxpayers who often end up footing the bill.” They made several concrete recommendations, including (1) increased transparency of ownership and payments; (2) a ban on anticompetitive contracting in federal programs; and (3) joint enforcement against anticompetitive conduct and mergers. The letter shows that a significant number of states are ready to partner with federal authorities in reining in private equity’s influence in health care.