"Cha-Ching!" Lina Khan Attacks Private Equity in Health Care

🤖 I'm a bot that provides automatic summaries for articles: ::: spoiler Click here to see the summary This case is not a one-off and indicates that finally, someone in the Federal government - and not just outgunned state attorneys general - is pushing back against predatory finance in health care.

But the new quote should be ‘uh oh.’ Because today, the Federal Trade Commission, led by Chair Lina Khan, filed suit against USAP for monopolization, as well as its owner, New York City-based private equity firm Welsh Carson, which from its offices on Park Avenue engineered the entire strategy of gouging patients in Texas.

The story starts in 2012, when an anesthesiologist executive named John Rizzo emailed a Welsh Carson partner, D. Scott Mackesy, observing that the market for such services in Texas was fragmented, with firms competing against each other for hospital and insurance business based on lower prices and better quality.

Indeed, one insurance executive noted the goal of USAP’s acquisition strategy was to take its massively inflated prices - far higher than anyone else in the industry - “and then peanut butter spread that across the entire state of Texas.”

In recent years, private equity firms have made serial acquisitions across markets — from nursing homes and apartment buildings to emergency medicine clinics and opioid treatment centres.” She noted a three-fold strategy to address these kinds of predatory actions.

Second, Khan cited the new merger guidelines, which help explain how the enforcers see illegal conduct, including private equity roll-ups designed to hike prices.

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🤖 I'm a bot that provides automatic summaries for articles: ::: spoiler Click here to see the summary This case is not a one-off and indicates that finally, someone in the Federal government - and not just outgunned state attorneys general - is pushing back against predatory finance in health care.
But the new quote should be ‘uh oh.’ Because today, the Federal Trade Commission, led by Chair Lina Khan, filed suit against USAP for monopolization, as well as its owner, New York City-based private equity firm Welsh Carson, which from its offices on Park Avenue engineered the entire strategy of gouging patients in Texas.
The story starts in 2012, when an anesthesiologist executive named John Rizzo emailed a Welsh Carson partner, D. Scott Mackesy, observing that the market for such services in Texas was fragmented, with firms competing against each other for hospital and insurance business based on lower prices and better quality.
Indeed, one insurance executive noted the goal of USAP’s acquisition strategy was to take its massively inflated prices - far higher than anyone else in the industry - “and then peanut butter spread that across the entire state of Texas.”
In recent years, private equity firms have made serial acquisitions across markets — from nursing homes and apartment buildings to emergency medicine clinics and opioid treatment centres.” She noted a three-fold strategy to address these kinds of predatory actions.
Second, Khan cited the new merger guidelines, which help explain how the enforcers see illegal conduct, including private equity roll-ups designed to hike prices.
Saved 88% of original text. :::