March 14, 2024

Federal probe investigates care quality impact of private equity mergers, acquisitions

Editor's Note

Making good on plans announced by the Biden administration in December, federal agencies have launched a public inquiry into how private equity mergers and acquisitions impact patient outcomes, worker safety, and healthcare access and costs, including costs to taxpayers.

 As reported by Dotmed Healthcare Business News on March 11, the  goal of the probe is to compare care quality before and after these transactions to develop future regulations and enforceable laws for reducing anti-competitive practices. It is being conducted by The Federal Trade Commission (FTC), the Department of Justice’s Antitrust Division, and the U.S. Department of Health and Human Services. These agencies have asked for public comments on deals between health systems and private buyers.

The agencies also are seeking information on transactions that do not need to be reported to the Justice Department or FTC for antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act. Such deals could evidence buyers profiting at the expense of quality through staff reductions, reducing competition, and other cost-saving measures.  

However, the article also quotes experts who maintain that evidence for consolidation and cost-cutting directly impacting care quality is “not entirely clear.”

Meanwhile, a recent report from the Senate Budget Committee’s Private Equity Stakeholder Project (PESP)—a separate investigation into these matters—identified a total of 1,135 private equity investment deals in 2023, evidencing continued interest from private buyers.

The request for information (RFI) in the White House probe “complements those issued by the Centers for Medicare & Medicaid Services on Medicare Advantage and by the FTC and HHS on how pharmaceutical middleman groups may be contributing to drug shortages,” the article concludes. “Patients, consumer advocates, doctors, nurses, healthcare providers and administrators, employers, insurers, and others are invited to respond to the RFI and will have until May 6 to submit comments at”

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