FTC, DOJ, and HHS Issue Request for Information on Private Equity Transactions in Health Care

The United States Federal Trade Commission (FTC), Department of Justice (DOJ) Antitrust Division, and Department of Health and Human Services (HHS), recently launched a public inquiry into private equity and other corporations’ increasing control over health care throughout the United States.

The three agencies issued a request for information asking for public comment on deals that are conducted by health systems, private payers, private equity funds, and other alternative asset managers that involve healthcare providers, facilities, or other ancillary products or services. The request for information is also seeking feedback on transactions that would not otherwise be reported to the DOJ or FTC for antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act. The agencies note that relevant transactions may involve dialysis clinics, nursing homes, hospice providers, primary care providers, hospitals, home health agencies, home- and community-based services providers, behavioral health providers, billing and collections services, revenue cycle management services, support for value-based care, data/analytics services, and other types of health care payers, providers, facilities, Pharmacy Benefit Managers (PBMs), Group Purchasing Organizations (GPOs), or ancillary products or services.

In the request for information, the agencies note that “robust competition in health care markets promotes lower health care costs and improved working conditions, while fostering high-quality patient care and driving innovation across the health care system.” However, based on recent trends, the agencies are worried that certain transactions may be generating profits for interested firms at the expense of patient health, worker safety, and affordable health care for patients and taxpayers. Therefore, the agencies express interest in hearing from patients and health care workers about how their experiences in the health care system changed after a facility or other provider where they work or receive treatment or services was acquired or underwent a merger.

The request for information followed a virtual workshop hosted by the FTC in early March 2024, which examined the role of private equity investment in the health care market.

The agencies are seeking input from all market participants, including patients, consumer advocates, doctors, healthcare providers and administrators, employers, and insurers. Comments must be submitted no later than May 6, 2024.

Other Related Actions

This announcement also follows the appointment of the first Chief Competition Officer within the Department of Health and Human Services, Stacy Sanders. In her role as Chief Competition Officer, Sanders is responsible for overseeing consolidation in the healthcare sector and “coordinating, identifying, and elevating opportunities across the Department to promote competition in health care markets.”

Additionally, the FTC and DOJ finalized new merger guidelines in late 2023 that are expected to slow the pace of health care mergers. These new guidelines lay the framework that the DOJ and FTC will use when reviewing proposed merger deals, but are not legally binding.

Agency Statements

“When private equity firms buy out healthcare facilities only to slash staffing and cut quality, patients lose out,” said FTC Chair Lina M. Khan. “Through this inquiry the FTC will continue scrutinizing private equity roll-ups, strip-and-flip tactics, and other financial plays that can enrich executives but leave the American public worse off.”

“Preserving competition in health care markets is a priority for the Department of Justice because of its important impact on the health and well-being of Americans,” said Assistant Attorney General Jonathan Kanter of the DOJ’s Antitrust Division. “This RFI will enable the agencies to accurately understand the modern market realities of the health care industry and forcefully enforce the law against unlawful deals. Hearing from patients, workers, and market participants will be critical in developing future enforcement and policy efforts relating to consolidation in the health care sector.”

“Increasing competition in health care markets gives people more choices. Competition helps ensure patients have access to high-quality, lower cost care, and that health care workers receive higher pay and work under better conditions. And it saves taxpayers money,” said HHS Secretary Xavier Becerra. “We need to do more to understand the impact of private equity and corporate dealmaking on our policymaking, regulatory decisions and enforcement actions. The Biden-Harris Administration is committed to improving transparency and competition in health care.”