Senator Warren asks regulators to watch for 'serial roll-ups' in health care
An NYU professor complained at a hearing last year that from small deals big antitrust problems grow.
One of the health policy topics getting more attention in Washington may soon be private equity firm-backed “serial roll-ups.”
Sen. Elizabeth Warren, D-Mass., raised that concern in a letter she recently sent to three Biden administration officials involved with keeping tabs on health care market competition.
A “private equity roll-up” is a move by an investment firm to use many small acquisitions to create big companies. Warren says in her letter that she believes private equity firms and insurers often use the roll-up strategy to gain high levels of market share through deals that are too small to get much, or any, attention from federal antitrust regulators at the Federal Trade Commission and the U.S. Department of Justice.
“Serial roll-ups have become pervasive in the health care industry, and have resulted in market dominance leading to higher prices, particularly when private equity has been involved,” Warren writes. “It is important that your agencies consider this trend in health care acquisitions and take a holistic view of market dominance in order to prevent harms to competition and patients.”
She sent the letter to FTC Chair Lina Khan, U.S. Health and Human Services Secretary Xavier Becerra and Jonathan Kanter, the assistant attorney general at the Justice Department’s antitrust division.
Warren, who is a member of the Senate Finance health care subcommittee, has been active in writing letters asking regulators to get tougher on health insurers and other health care system players in recent weeks.
She has expressed concerns about an agreement by UnitedHealth’s Optum unit to acquire Steward Health Care’s physician group, cybersecurity arrangements at UnitedHealth’s Change Healthcare subsidiary and Commerce Department efforts to hold down prescription drug prices.
Related: Showdown! FTC chief gets tough on private equity’s takeover of health care
Dan Francis, a New York University law professor, may have raised lawmakers’ interest in serial roll-ups in March 2023, when he talked about the issue at a U.S. Senate Judiciary subcommittee hearing on antitrust concerns affecting digital markets.
He suggested that serial roll-ups had caused stealth consolidation in the kidney dialysis market and affected patients’ access to dialysis.