Over the past two decades, the rise of corporate interest in healthcare has triggered structural changes in the American medical landscape. Corporate entities, including retail companies and private equity (PE) firms, have purchased tens of thousands of medical practices since 2000 (1). In fact, in 2024, corporate-owned practices outnumbered hospital-owned practices for the first time (2). The expansion of PE into healthcare has been a major and novel shift, with these firms currently owning approximately 30% of for-profit hospitals and employing at least 7% of physicians in the United States in 2024 (3, 4). Although this type of ownership promises certain advantages, such as potentially higher physician pay and increased operational efficiency, its economic consequences have raised alarm, resulting in the Federal Trade Commission (FTC) initiating recent landmark lawsuits related to anesthesia and medicine more broadly (5, 6).

Typically, PE firms acquire promising companies, implement quick changes to improve revenue, and sell the companies within 5 to 8 years for a large return on investment (3). In the healthcare sphere, anesthesia practices are particularly attractive to PE firms due to their high demand (7). Additionally, common issues in this specialty, like regional scarcity and staffing shortages, set the stage for private equity firms to engage in “roll-up” strategies, which involve the acquisition, development, and consolidation of practices within a certain area (8, 9). By the end of a “roll-up,” one practice takes the place of multiple formerly independent practices, with ostensibly lower costs and higher efficiency (8). While this model is not inherently illegal, strategically “rolling up” to achieve market dominance and stifle competition may violate federal law, which requires the FTC to investigate and potentially initiate lawsuits (9), as has occurred against large anesthesia companies.

In Colorado and Texas, PE parent firm Welsh, Carson, Andersen & Stowe (WCAS) purchased dozens of regional anesthesia practices and consolidated them under one major company, the United States Anesthesia Partners (USAP), between 2012 and 2019 (8-13). During this process, WCAS and USAP also implemented cost-saving and revenue-increasing tactics, such as workforce restructuring and aggressive billing (8, 13, 14). Although legal actions led by the state’s Attorney General ended its alleged monopoly in Colorado by 2024 (10), USAP quickly became the dominant anesthesia provider in Texas, earning almost 60% of hospital-only anesthesia revenue across the entire state due to nearly exclusive contracts with hospitals and a dominant market share (15, 16).

Although PE firms have implemented this “roll-up” model in the healthcare landscape for over a decade, the FTC’s 2023 lawsuit against USAP and WCAS represents the first federal challenge against this strategy. In the original complaint, the FTC alleged that the firms participated in “roll-up” strategies to an anticompetitive extent by possibly committing three key antitrust law violations: monopolizing the anesthesia market in Texas, engaging in price-setting agreements with its few remaining competitors, and striking a market allocation deal to keep another competitor out of USAP’s region (17).

In May 2024, a district court dismissed the lawsuit against WCAS, as the firm no longer owns a majority of USAP (17). However, to avoid a separate administrative lawsuit, WCAS reached a settlement with the FTC in January 2025, under the conditions that the company limits its involvement with USAP, requests approval for future anesthesia acquisitions, submits compliance reports, and notifies the FTC about acquisitions of any other type of physician practice (17, 18).

The lawsuit against USAP, however, remains ongoing, and its decision will likely shape the future of PE in the healthcare landscape (17). Given frequently noted concerns with PE-backed medical practices, such as poor care quality and compromised patient safety, many experts within the healthcare community are hoping for an FTC win, which may result in greater scrutiny and regulatory barriers for future PE endeavors in healthcare (3, 12, 19, 20). In the case of a USAP win, however, these strategies will likely continue without oversight, potentially exacerbating current issues (12, 20). In either case, the FTC’s lawsuits against USAP and WCAS have called private equity’s role in healthcare into question, with potentially major implications on an industry-wide scale.

References

1: Kane, C. 2023. “Recent changes in physician practice arrangements: shifts away from

private practice and towards larger practice size continue through 2022.” Report. American Medical Association: Policy Research Perspectives. URL: https://www.ama-assn.org/system/files/2022-prp-practice-arrangement.pdf

2: Avalere Health and Physicians Advocacy Institute. 2024. “Updated report: hospital and corporate acquisition of physician practices and physician employment, 2019-2023.” Report. Physicians Advocacy Institute. URL: https://www.physiciansadvocacyinstitute.org/Portals/0/assets/docs/PAI-Research/PAI-Avalere%20Physician%20Employment%20Trends%20Study%202019-2023%20Final.pdf

3: Garber, J. 2024. “The rising danger of private equity in healthcare.” Article. Lown Institute. URL: https://lowninstitute.org/the-rising-danger-of-private-equity-in-healthcare/

4: Kane, C. 2024. “Physician Practice Characteristics in 2024: Private Practices Account for Less

Than Half of Physicians in Most Specialties.”  American Medical Association: Policy Research Perspectives. URL: https://www.ama-assn.org/system/files/2024-prp-pp-characteristics.pdf

5: Smith, T. 2023. “3 top reasons why doctors are selling their practices to hospitals.” Article. American Medical Association: Private Practices. URL: https://www.ama-assn.org/practice-management/private-practices/3-top-reasons-why-doctors-are-selling-their-practices

6: Scott, A., Taylor, T., Russell, G. and Sutton, M. 2024. Associations between corporate ownership of primary care providers and doctor wellbeing, workload, access, organizational efficiency, and service quality. Health Policy, vol. 142(105028). DOI: 10.1016/j.healthpol.2024.105028

7: Newitt, P. 2024. “Private equity has a grip on anesthesiology – here’s why.” Article. Becker’s ASC Review. URL: https://www.beckersasc.com/anesthesia/private-equity-has-a-grip-on-anesthesiology-heres-why/

8: Walsh, D. 2025. “To cut healthcare costs, scrutinize ‘rollups’.” Article. Chicago Booth Review. URL: https://www.chicagobooth.edu/review/to-cut-healthcare-costs-scrutinize-rollups

9: Hagy, P. 2023. “Private equity’s favorite way to make acquisitions may be illegal, FTC chair Lina Khan says.” Article. Fortune. URL: https://fortune.com/2023/07/19/private-equity-ftc-mergers-acquisitions-rollup-strategy-lina-khan-antitrust/

10: Maddox, W. 2025. “Why Colorado broke up this Dallas anesthesia group’s ‘monopoly’.” Article. D Magazine. URL: https://www.dmagazine.com/healthcare-business/2025/01/why-colorado-broke-up-this-dallas-anesthesia-groups-monopoly/

11: Phillips, N. 2024. “Colorado AG breaks up anesthesiology monopoly that dominated Denver and Durango health care markets.” Article. The Denver Post. URL: https://www.denverpost.com/2024/02/26/colorado-usap-settlement-us-anesthesiology-partners-antitrust-monopoly/.

12: American Academy of Emergency Medicine. 2023. “Statement in Response to the FTC Suing Private Equity Backed Anesthesia Staffing Firm.” Press release. American Academy of Emergency Medicine. URL: https://www.aaem.org/statements/ftc-suing-private-equity-anesthesia-firm/

13: Tkacik, M. 2023. “Heads they ‘cha-ching!’; tails they take away your malpractice insurance: a tale of two private equity–spawned medical mega-practices.” Article. The American Prospect. URL: https://prospect.org/health/2023-09-22-private-equity-medical-rollups-malpractice-insurance/

14: Whoriskey, P. 2023. “Financiers bought up anesthesia practices, then raised prices.” Article. The Washington Post. URL: https://www.washingtonpost.com/business/2023/06/29/private-equity-medical-practices-raise-prices/

15: Agresta, M. 2023. “While we were sleeping: the Feds say a price-fixing scheme costs Texas patients tens of millions.” Article. Texas Monthly. URL: https://www.texasmonthly.com/news-politics/anesthesiology-antitrust-complaint-private-equity/

16: Hahm, K. 2023. “FTC lawsuit debuts new enforcement agenda targeting private equity ‘roll-up’ acquisitions against Texas anesthesia provider and PE sponsor alleging multiple antitrust violations.” Article. American Health Law Association: Health Law Weekly. URL: https://www.hunton.com/media/publication/95059_ftc-lawsuit-debuts-new-enforcement-agenda-targeting-private-equi.pdf

17: Federal Trade Commission v. U.S. Anesthesia Partners, Inc. and Welsh, Carson, Anderson &

Stowe XI, L.P., WCAS Associates XI, LLC, Welsh, Carson, Anderson & Stowe XII, L.P.,

WCAS Associates XII, LLC, WCAS Management Corporation, WCAS Management, L.P., and WCAS Management, LLC, No. 4:23-cv-03560 (S.D. Tex. Sept. 21, 2023). URL: https://www.ftc.gov/system/files/ftc_gov/pdf/2010031usapcomplaintpublic.pdf

17: Muoio, D. 2025. “FTC orders PE firm Welsh Carson to limit anesthesiology investments, role in USAP.” Article. Fierce Healthcare. URL: https://www.fiercehealthcare.com/regulatory/ftc-secures-11th-hour-settlement-pe-firm-welsh-carson-over-alleged-roll-scheme

18: Federal Trade Commission. “FTC approves final order with Welsh Carson.” Press release. Federal Trade Commission: For Your Information. URL: https://www.ftc.gov/news-events/news/press-releases/2025/05/ftc-approves-final-order-welsh-carson

19: Berg, D. 2023. “FTC Chief gears up for a showdown with private equity.” Article. Physicians Society of Central Florida. URL: https://pscfl.org/news/659248/FTC-chief-gears-up-for-a-showdown-with-private-equity.htm

20: Meyer, H. 2023. “Lina Khan speaks out about FTC’s private equity lawsuit: ‘We’re putting the market on notice’.” Article. Fortune. URL: https://fortune.com/2023/11/17/lina-khan-ftc-private-equity-lawsuit-were-putting-the-market-on-notice/