Private equity’s presence in anesthesia has been the subject of several recent lawsuits and studies on healthcare costs as the specialty becomes increasingly consolidated.
Here are eight notes private equity group’s recent moves in anesthesia:
1. A study published in July by the University of Chicago’s Booth School of Business found that anesthesia costs in Texas jumped nearly 30% in two years after U.S. Anesthesia Partners acquired most large practices around Houston and Dallas.
2. In a lawsuit that was settled in May, the Federal Trade Commission limited the ability of private equity firm Welsh, Carson, Anderson & Stowe, parent company of USAP, to involve itself in future USAP-led acquisitions. The organization must notify the FTC of specified future acquisitions and investments in anesthesia and other hospital-based physician practices.
3. Beyond acquisitions, consolidation was paired with contracting practices that reduced competition — such as aligning rates across practices and limiting entry by rival groups. These strategies strengthened USAP’s leverage in negotiations with commercial payers, contributing to higher reimbursement levels.
4. Even after new anesthesia practices entered Texas markets, their presence had little effect on reversing USAP’s higher prices, according to the University of Chicago study. This suggests that once consolidation pushed rates upward, competition did not restore costs to prior levels.
5. The researchers also concluded that if the FTC were to pursue anticompetitive enforcement actions in the 18 studied markets, it would cut anesthesia expenditures by roughly $120 million per year.
6. A separate study published in April 2022 in JAMA found that anesthesia prices increased an average of 26% after private equity acquisitions, with nearly one-third of anesthesiologists absorbed through such buyouts.
7. About 20% of anesthesia practices made up private equity physician practice buyouts, according to the study, and about 33% of anesthesiologists were acquired by private equity physician practice buyouts.
8. Several states, the most recent being California, have recently passed legislation to ban or restrict the presence of private equity in healthcare transactions.