On January 15, 2025, HHS released a report highlighting negative sentiments from commenters toward consolidation, private equity, and private insurers in health care markets. The comments were received in response to a joint Request for Information (RFI) issued by FTC, DOJ, and HHS in March 2024 seeking public feedback on the impact of corporate ownership of health care businesses.
Under the Biden Administration, the leadership of the FTC, DOJ, and HHS criticized private equity investment and consolidation in health care. In December 2023, the agencies announced a joint effort intended to combat health care inflation by enhancing competition within the health care sector. A virtual workshop hosted by the FTC in March 2024 titled “Private Capital, Public Impact: An FTC Workshop on Private Equity in Health Care” featured several speakers, including representatives from DOJ and HHS, who discussed criticisms of private equity investment in health care. In March 2024, the agencies issued the joint RFI seeking public comment to investigate how certain transactions in the health care market—carried out by health systems, private equity funds, private insurers, and other private investors—might lead to reduced competition, higher costs, and compromised quality of care. After reviewing more than 2,000 comments received in response to the RFI, HHS issued “HHS Consolidation In Health Care Markets RFI Response” (the Report) on January 15, 2025.
The Report states that it “is not intended to be a comprehensive summary of all topics, but instead focuses attention on evidence, trends, and policy ideas that deserve greater scrutiny and consideration.” In the Report, HHS makes the following assertions: (1) provider consolidation increases prices and reduces access for patients; (2) M&A in health care services, especially in private equity funded transactions, results in process changes and quality reductions; (3) reviews from physicians that work with private equity firms are mixed; (4) there is widespread desire for transparency on private equity led transactions; and (5) there is dissatisfaction with private health insurers, especially vertically integrated insurers.
HHS also sets forth certain policy considerations in the Report, including the following:
- scrutinizing potentially harmful transactions and engaging in more vigorous antitrust enforcement to stop or reverse the trend of consolidation;
- improving health care entity ownership transparency, including expanding upon CMS's nursing home ownership transparency rule;
- enhancing health care M&A disclosure by reducing reporting thresholds, mandating review and approval, and providing relevant authorities with the necessary data and resources to review health care transactions; and
- furthering data sharing and collaboration across agencies, Congress, and state and local authorities in a comprehensive government approach to foster competition.
The timing of the Report is notable, as it was issued in the final days of the outgoing Biden Administration. It remains to be seen whether private equity investment in health care will continue to be an area of focus for the agencies under the second Trump Administration. Under the first Trump Administration, the FTC challenged a number of proposed deals involving large health systems and insurers, but transactions involving private equity sponsors were not subject to the same level of scrutiny. However, there are signs of growing bipartisan support to scrutinize private equity’s role in health care. Earlier this month, the Senate Budget Committee chaired by Senators Sheldon Whitehouse (D-RI) and Charles Grassley (R-IA) issued a bipartisan staff report criticizing private equity’s impact on the U.S. health care system.
The full text of HHS’s Report is available here.
