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SPONSORED CONTENT

20TH ANNUAL ACG CAPITAL CONNECTION

Antitrust Enforcers Rea rm Focus on Private Equity in

Healthcare at Public Workshop

engagement. The speakers asserted that a private
equity company’s short-term investment horizon,
sometimes no more than ﬁ ve to seven years away,
creates an undue focus on short-term proﬁ ts and
the payment of dividends to investors, and this
can lead to reduced investments in patient care
and endanger the long-term stability of acquired
healthcare providers.
From a competition perspective, Khan and Kanter
both celebrated their work to unwind interlocking
directorates, where private equity companies
DAVID C. KULLY KENNETH BILL KATZ ANNA P. HAYES might have representatives on boards of
Partner, Holland & RACOWSKI Partner, Holland & Associate, Holland & competing providers, which the speakers view as
Knight Partner, Holland & Knight Knight potentially reducing competition between those
Knight providers. Khan and Kanter also referred again to
the strategy of serial acquisitions, or “roll-ups,” of
a number of small providers that, before the 2023
revised Merger Guidelines allowed consideration
s Holland & Knight observed previously, Neronha in a “ﬁ reside chat” to discuss Neronha’s
the Biden Administration’s antitrust experiences related to the 2021 sale of Prospect of the cumulative e ect of proposed deals, had
Aenforcers have trained their sights Medical, an investor-owned healthcare system, by historically sidestepped antitrust review. Blum
on private equity ﬁ rms and their portfolio private equity ﬁ rm Leonard Green & Partners. also noted that consolidation has caused rising
companies, including in a Sept. 21, 2023, lawsuit costs for CMS (Medicare/Medicaid) and explained
challenging one private equity ﬁ rm’s “roll-up” of A signiﬁ cant theme of the workshop focused that CMS is working with the agencies to share
anesthesiology practices in Texas. The agencies on how participants believe private equity data in an e ort to understand the impacts of
took a more measured approach on March 5, investments reduced quality of care and consolidation.
2024, when the Federal Trade Commission (FTC) worsened outcomes for patients. Certain Kanter, Slaughter and FTC Commissioner Alvaro
hosted a public workshop to examine the role concerns were unrelated to any possible impact Bedoya each mentioned the joint FTC/DOJ/HHS
of private equity investment in the healthcare on market concentration or competition. For Request for Information issued earlier in the day.
industry. But the message from the workshop instance, speakers expressed concern about The RFI seeks public comments on healthcare
remains unchanged: The antitrust agencies see how ﬁ nancial motivations of private equity industry transactions – both reportable and not
private equity as inﬂ uencing healthcare in a companies can undercut incentives to provide reported under the Hart-Scott-Rodino Act –
number of ways they regard to be worrying and high-quality patient care, especially if the complex involving private payers, private equity ﬁ rms and
worthy of continued close scrutiny. corporate structures of private equity companies other alternative asset managers. The agencies
prevent regulators and the general public from will accept comments until May 6, 2024.
The workshop began with opening remarks by understanding who might possess a ﬁ nancial
FTC Chair Lina Khan, U.S. Department of Justice interest in any particular healthcare system This workshop and the joint request for public
(DOJ) Antitrust Division Assistant Attorney General or provider. This issue was raised repeatedly, comments conﬁ rm that private equity, particularly
Jonathan Kanter, U.S. Department of Health and particularly with regard to ownership of nursing in the healthcare ﬁ eld, will continue to be highly
Human Services (HHS) Inspector General Christi homes, hospices and managed care organizations scrutinized, not only by the FTC and DOJ in
Grimm and Centers for Medicare & Medicaid and the special need for accountability to antitrust-related actions, but also by other federal
Services (CMS) Principal Deputy Administrator ensure the safety of patients in those systems. and state governmental bodies concerned with
and Chief Operating O cer Jonathan Blum. The Another issue speakers raised as unique to fraud and abuse, consumer protection and the
workshop then turned to several moderated the private equity model was the practice of provision of healthcare services to the public.
discussions including agency o cials, healthcare encumbering providers with the responsibility Holland & Knight’s Antitrust Team is available to
workers, and scholars. To conclude the workshop, to service large amounts of debt. A ﬁ nal issue discuss questions about the antitrust agencies’
FTC Commissioner Rebecca Kelly Slaughter discussed repeatedly in the workshop was the concerns about private equity and how it might
engaged Rhode Island Attorney General Peter short-term nature of a private equity ﬁ rm’s typical impact your businesses.

TEXAS EVENTS YOU CAN’T MISS

ACG Houston Deal of the Year Awards Craft Beer Bonanza 2024 Wine Tasting and DealSource
April 24 Houston Country Club May 7 On the Levee, Dallas Sept. 18 Frontiers of Flight Museum, Dallas

INDUSTRIALS & ENERGY
UNCORKED

Fort Worth Casino Night 11 Annual Private Equity ACG Houston Industrials
th
April 25 The Marq, Southlake Two-Step Conference and Energy Uncorked
May 9 San Antonio Country Club Oct. 9 The Revaire, Houston

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