Washington, D.C. — Following news that the Federal Trade Commission has filed a lawsuit against U.S. Anesthesia Partners (USAP) and private equity firm Welsh, Carson, Anderson & Stowe alleging that the two monopolized the anesthesiology market in Texas through serial acquisitions, price-setting schemes, and a market allocation agreement, the American Economic Liberties Project released the following statement.

“In suing USAP, the Commission is proving its commitment to protecting patients against predatory serial acquisition strategies in healthcare — historically, a regulatory blind spot,” said Sara Sirota, Policy Analyst at the American Economic Liberties Project. “Fueled by its private equity owners, USAP would buy up an anesthesia group, drive up its prices, and then ‘peanut butter spread that across the entire state of Texas.’ It bragged to potential financiers about its monopolization scheme — ‘Cha-ching!’ — all while patients and plan sponsors lost out on affordable and quality care. Patients deserve a competitive market for such a critical service, and shouldn’t be forced to choose a private-equity-backed monopolist focused on short-term profit over quality of care.”

USAP was founded in 2012 by New York-based private equity firm Welsh, Carson, Anderson & Stowe to eliminate the competitive anesthesiology market in Texas and extract profits at the expense of patients and doctors. While big, high-profile mergers and acquisitions make national news, USAP’s price-gouging is a reminder that serial acquisitions—the repeated acquisitions of smaller players in fragmented industries—can be just as harmful. And while serial acquirers have consolidated industries as disparate as newspapers and nursing homes, the consequences in healthcare are particularly dangerous. According to a 2022 study in the Journal of the American Medical Association, prices paid for anesthesiology increased 26% after outpatient care facilities switched to private equity-owned providers. USAP has a particularly troubling history, with one insurer claiming USAP charged almost double the median rate it paid to other anesthesiology groups. All this is devastating for patients: it means higher out-of-pocket costs, as well as higher insurance premiums down the line.

Despite the clear harms of serial acquisitions, they have historically flown under the regulatory radar. That’s because merger filing thresholds under the Hart-Scott-Rodino Act only require that companies report transactions to the FTC if they are valued at over $101 million. Last December, Economic Liberties published a report on serial acquisitions, noting that in 2021 there were 21,994 total merger transactions (both public and private) in the United States, yet under 20% – only 4,130 – were reported to the FTC. Similarly, in 2020 there was a total of 16,723 transactions, and only 1,637 – under 10% – were reported.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.