FTC accuses U.S. Anesthesia Partners of creating monopoly, driving up prices

HOUSTON - The Federal Trade Commission says a monopoly has cost Texans tens of millions of dollars more each year for anesthesia services when undergoing medical procedures, including in Houston.

The FTC has filed suit against a private equity firm and U.S. Anesthesia Partners, accusing them of a ten-year acquisition spree to suppress competition and drive up prices.

"As you know anesthesiology services are quite critical. You’re in the hospital, you're getting a procedure, you want anesthesia," said Lina Kahn, Chair of the Federal Trade Commission.  

The FTC sued private equity firm Welsh, Carson, Anderson & Stowe, which created U.S. Anesthesia Partners.

PREVIOUSLY ON SULLIVAN'S SMART SENSE: CFPB warns some tuition payment plans come with risks

"What this firm proceeded to do was pursue a roll-up scheme where they bought up a whole set of anesthesiology practices across Texas in Houston, Dallas, San Antonio, Austin, and Amarillo, and ultimately used that consolidated power to jack up prices," said Kahn in an interview with FOX 26.

The suit says USAP also had illegal price-setting agreements with remaining independent practices and struck a deal to keep a competitor out of USAP territory.

"We’d like the court to find liability and ultimately provide relief. That relief would entail restoring competition to all of these Texas markets and ultimately that competition could mean lower prices and better service for Texans," said Kahn.

U.S. Anesthesia Partners sent us the following statements in response to the suit:

Dr. Derek Schoppa, a practicing USAP Physician in Texas and a USAP Board member, said, "The FTC’s intended outcome threatens to disrupt and restrict patients’ equitable access to quality anesthesia care in Texas and will negatively impact the Texas hospitals and health systems that provide care in underserved communities. The FTC’s civil complaint is based on flawed legal theories and a lack of medical understanding about anesthesia, our patient-oriented business model, and our level of care for patients in Texas."

DOWNLOAD THE FOX 26 HOUSTON APP BY CLICKING HERE

Dr. J. Scott Holliday, another USAP physician in Texas and a USAP Board member, added, "We are a team of frontline clinicians who provide outstanding anesthesia care to over 2 million patients across the country each year. Over the last decade, our collaborative partnerships with facilities and health systems have led to improved outcomes with positive impacts on the overall costs of care to the hospital systems, health plans, and patients we serve. We are confident we will prevail in this misguided litigation."

This comes after the Journal of the American Medical Association has reported that over the last decade private equity firms have been buying up physician practices across the country in anesthesia, emergency medicine, and dermatology. JAMA reported patient costs went up 26% after private equity firms took over anesthesia practices.