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The University of Chicago Business Law Review

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531

Abstract

The corporatization of health care in the United States has forced us to confront society’s moral expectations of the industry, which serves uniquely vulnerable consumers. Health care has become increasingly more lucrative, attracting private equity (“PE”) investment, specifically in private physicians’ practices. Physicians find PE transactions appealing because physicians have difficulty competing with large hospital systems and complying with expansive regulatory requirements. The attention given by PE to health care has raised concerns regarding the tension between the expected priorities of PE firms and health care. Additionally, the nature of PE investments through roll-ups of smaller companies has regulators worried that they cannot control PE’s involvement in the industry. The Federal Trade Commission (“FTC”) is one regulatory agency that has explicitly addressed PE investments through revisions to its Merger Guidelines to ensure PE does not slip through its grasp.

As PE roll-ups are a type of health care consolidation, this Comment will compare the FTC’s past efforts to regulate hospital mergers with its potential future efforts to regulate PE investment in health care under the 2023 Merger Guidelines. The Comment also states how the 2023 Merger Guidelines still fall short of effectively regulating PE investment in health care and how healthcare-specific guidelines could improve their effectiveness. It additionally argues that it may be best to let PE investment continue until the market self-corrects. The Comment provides supplementary methods to undermine the attractiveness of PE investment for physicians, which would decrease the frequency of these transactions and speed up the economic self-correcting process. The various paths forward further support the Comments overarching argument that, as it currently stands, the FTC’s antitrust laws are not effective in regulating PE investment in health care.

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