Senators accuse major anesthesiology firm of anticompetitive practices

The senators wrote that “USAP is emblematic of the long-standing problems associated with [private equity’s] involvement in our health care system.” Specifically, they allege the company used monopoly power in Colorado to hike prices for insurers and patients and engaged in other anticompetitive practices.

Tony Good, a spokesman for the physician group, disputed the contents of the senators’ letter, saying in a statement that it “contains many inaccuracies and greatly misrepresents our organization.”

“USAP is a physician-owned, patient-centric organization that provides high-quality care and is dedicated to advancing the field of anesthesiology,” Good said. “Our quality programs have been reviewed by independent third parties and found to be among the best.”

Financiers bought up anesthesia practices, then raised prices

Created in 2012 by private-equity firm Welsh, Carson, Anderson & Stowe, U.S. Anesthesiology Partners has grown rapidly and today counts a staff of 4,500 clinicians in nine states.

The role of private-equity investors as owners of health-care companies has become the focus of growing criticism from some politicians and researchers who accuse them of building monopolies and raising prices. When anesthesia companies backed by private-equity investors took over at a hospital outpatient or surgery center, they raised prices by an average of 26 percent more than facilities served by independent anesthesia practices, according to a 2022 study published in JAMA Internal Medicine based on six years of data. The authors did not name the companies in that study.

USAP has drawn repeated scrutiny.

In June, The Washington Post published a report based on internal company documents detailing how USAP built the largest anesthesiology practice in Colorado — first by buying the biggest anesthesiology group, then the next largest, then a few more — and then raised prices. The article mentioned that the Federal Trade Commission had been looking into the company’s practices. USAP disputed that it raised prices unilaterally, arguing that the increases reflected broader market forces in the areas where it operates.

In September, the FTC alleged in a lawsuit that USAP had engaged in a decade-long scheme to drive up the price of anesthesiology by buying up more than a dozen Texas practices to monopolize that market.

The company has denied the allegations and said the FTC lawsuit is based on flawed legal theories. USAP and Welsh Carson executives also have described the consolidation of doctor practices as a means of creating “synergy.”

The lawsuit “threatens the ability of a leading physician-owned anesthesiology practice to continue to provide high quality service to Texas hospitals and other healthcare facilities,” attorneys for the company wrote in a motion filed earlier this month.

Moreover, the attorneys wrote, the lawsuit reflects the FTC’s “ever-expanding sense of its own authority” and amounts to the agency “placing its thumb on the scale to support the nation’s wealthiest and most powerful commercial insurance companies.”

The letter from the senators is based on the Post investigation and the FTC lawsuit. It requests, among other things, that the company provide a list of all of company dividends and their recipients, a list of all the anesthesiology firms it has acquired, and a list of how many noncompete agreements have been enforced against company physicians.

“The practices described in the recent report and the FTC’s lawsuit are deeply concerning and suggest that USAP has used anticompetitive practices to build up monopoly power, which it has leveraged to decrease quality of care, increase costs for patients, and reduce physician autonomy,” the letter said.