Chicago – Attorney General Kwame Raoul, as part of a multistate coalition of 11 attorneys general, submitted a comment letter in response to the Federal Trade Commission and U.S. Departments of Justice and Health and Human Services’ request for information regarding consolidation in health care by private equity. In their letter, the attorneys general outline possible enforcement and regulatory actions to address the detrimental effects of private equity health care transactions that have harmed patients and undermined the financial viability of health care providers.
“Health care consolidation, which is often driven by private equity, can lead to higher prices for health care services while quality of care worsens or remains stagnant,” Raoul said. “In Illinois, my office successfully advocated for legislation that allows more state oversight of proposed health care mergers and acquisitions. I join my fellow attorneys general in calling for additional protections at the federal level.”
Private equity-driven consolidation in health care has doubled over the last two decades. Research shows that between 2010 and 2020, publicly reported transactions totaled at least $750 billion in deals nationwide to acquire hospitals, physician practices, nursing homes, hospices, and behavioral health care. However, “roll-up” health care transactions—a strategy used in private equity to consolidate multiple smaller health care entities into a larger organization—fall under the threshold for notifying federal antitrust authorities. Recent research documents reveal that private equity-backed physician practices now control access to over half of available health care services within specialties and metropolitan areas.
In the letter, Raoul and the attorneys general describe how the business practices of private equity-owned health care systems can lead to higher health care costs, poor health care quality, and less access to care for patients. To ensure fair competition and eliminate potential anticompetitive practices, the attorneys general advocate for federal and state enforcers to have access to information on organizational structure, quality of care, and enhanced payments to providers that participate in federal and state health programs. They call for no exclusions for organizational structures where an investor owns less than 25% of a holding entity or healthcare asset. The coalition also calls for prohibiting participants in federal and state healthcare programs from using anticompetitive contracting practices that can be detrimental to patient access and quality of care.
The comment letter is the most recent effort by Attorney General Raoul to increase oversight of healthcare consolidation. Raoul initiated legislation that went into effect in January 2024 establishing a premerger notification program at the state level requiring healthcare facilities and provider groups to notify the Attorney General within 30 days of a proposed merger or acquisition.
The law better equips the Attorney General’s office with information necessary to determine whether a proposed transaction warrants an investigation and potentially challenge anticompetitive conduct that could substantially lessen competition or harm the public or employees.
Attorney General Raoul is joined in sending the comment letter by the attorneys general of California, Connecticut, Delaware, the District of Columbia, Minnesota, New Jersey, Oregon, Pennsylvania, Rhode Island, and Washington.