‘Life or death’: FTC’s Khan says private-equity ‘incursion’ into healthcare drives up mortality rates

Federal Trade Commission Chair Lina Khan said in an interview with Bloomberg’s “Odd Lots” podcast Thursday that she is particularly concerned about the impact of private equity in the healthcare space.

Read more: FTC’s Khan puts private equity ‘on notice’ that roll-up strategies could be illegal

“In the U.S. we pay more for healthcare than any other country in the [Organization for Economic Cooperation and Development], and health outcomes are worse off,” she said, arguing that this is in part due to a “lack of competition” in the healthcare industry.

“One of the trends that we’ve seen over the last decade is greater expansion of private equity in healthcare markets,” she said. “We’ve been hearing from … healthcare workers about the way in which private equity’s incursion can result in detrimental outcomes.”

Khan pointed to a recent study that showed a correlation between private-equity interest in nursing homes and higher mortality rates at those facilities.

“This is not just about pricing. It can really be life or death,” Khan said.

In September, the Federal Trade Commission sued U.S. Anesthesia Partners Inc. and private-equity firm Welsh, Carson, Anderson & Stowe, alleging that the companies used illegal, anticompetitive methods to consolidate the anesthesiology industry in Texas.

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Khan said when the lawsuit was announced that Welsh, Carson, Anderson & Stowe “spearheaded a roll-up strategy and created USAP to buy out nearly every large anesthesiology practice in Texas,” adding that the strategy, “along with a set of unlawful agreements to set prices and allocate markets,” enabled the company to artificially raise prices.

USAP said in September that it will contest the FTC’s “overreaching and misinformed” complaint in court and that the case “threatens to disrupt and restrict patients’ equitable access to quality healthcare.”