Chris Gash
To Cut Healthcare Costs, Scrutinize ‘Rollups’
A stealthy approach to consolidating market power may be driving up prices.
- By
- July 07, 2025
- CBR - Public Policy
Starting in 2012, US Anesthesia Partners and the private equity group Welsh, Carson, Anderson & Stowe began acquiring anesthesia practices across Texas. Over several years, they made 13 purchases, consolidating much of the state’s metropolitan market. In 2023, the Federal Trade Commission opened an antitrust investigation, the first of its kind to tackle a “rollup,” in which consolidation takes place over time and through many acquisitions, each typically small enough to avoid government notice.
Using information made public by the investigation, Duke’s Aslihan Asil, Chicago Booth PhD student Paulo Ramos, Northwestern’s Amanda Starc, and Booth’s Thomas Wollmann demonstrate that this anesthesia rollup in Texas increased local patient costs by roughly 30 percent. Moreover, they identified other similar situations—potential rollups—ongoing across the United States. Unwinding all of these would save consumers hundreds of millions of dollars, according to the researchers.
The rollup conducted by USAP and Welsh Carson unfolded as a model PE operation. The partnership first made a relatively large acquisition, of Greater Houston Anesthesiology, which employs 220 anesthesiologists. Following that purchase, known in PE parlance as the “platform,” the partnership over the next few years acquired several “add-ons,” smaller operations in the same or neighboring markets. (“Cha-ching!” was the Welsh Carson healthcare group head’s reaction after one transaction, according to a lawsuit filed by the FTC.)
With this template in mind, the researchers gathered national data on clinical anesthesiologists in the United States and their employers through the Centers for Medicare & Medicaid Services. They collected data on platform and add-on acquisitions made between 2012 and 2021 through PitchBook, a data information site about capital markets; Becker’s Hospital Review; and online press releases. Sifting through this information, the researchers found 18 other markets where the details, which collectively indicated a trend toward slow consolidation, mirrored many of those from Texas. Together, these anesthesia markets represent 20 percent of the US population.
When the researchers analyzed the effects of these potential rollups, their one key finding was a significant increase in anesthesia prices, which were trending upward relatively smoothly until the purchase of add-ons. At that point, they rose sharply, by 18 percent on average within six months, and 25–30 percent within two years.
Consolidation led to market concentration
New entry didn’t sufficiently correct for this, the researchers find. Competitors may enter a market to undercut prices, but when the researchers modeled this possibility, they find only a relatively small effect.
They tested various other explanations for the price jumps. Maybe the partnerships had recognized that products or services were underpriced, for example—except that the researchers didn’t see price increases until after add-ons led to consolidated market power. Did higher prices reflect higher-quality service? The researchers looked at two standard variables related to quality of care—unintentional dural punctures, the most common serious complication in obstetric anesthesia administration, and 30-day hospital readmission rates—and observed no appreciable improvement. This, they acknowledge, is not a definitive finding, as they don’t have data for some other dimensions of quality, such as patient wait times.
The rollups look like a stealthy approach to consolidating market power, the researchers conclude. And if the FTC were to pursue enforcement actions in these 18 markets, effectively reversing the mergers and “unwinding” the potential rollups, it would cut anesthesia expenditures by roughly $120 million per year, the study finds.
Moreover, such enforcement could deter future rollups. The researchers identified another 89 markets where, as of 2021, companies had made a platform acquisition but not any add-ons. Squashing potential rollups in these additional markets could save consumers another $126 million per year, the researchers estimate, noting that they focused only on anesthesiology. Rollups are spreading throughout specialty healthcare markets, including gastroenterology oncology, and radiology, the study points out.
Policymakers interested in healthcare reform should pay more attention to rollups, the researchers argue. Now the most common strategy deployed by private equity firms, they accounted for 80 percent of PE deal volume in 2022, up from 40 percent in the early 2000s, according to PitchBook. They’re reshaping many medical markets across the country. Earlier research by Asil, Yale’s John Manuel Barrios, and Wollmann finds that rollups exceeded $1 trillion in annual deal volume in the US in 2021 and disproportionately targeted healthcare services.
A lot of policy research looks at the differences between different types of providers—to determine, for example, whether nonprofit providers are better than for-profit ones at delivering healthcare, or whether physician-owned practices do better than corporate-owned ones. “We find that competitive considerations can swamp those concerns,” write Asil, Ramos, Starc, and Wollmann. They argue that rollups and the higher prices that result represent a bigger issue, and one that would make antitrust law a more direct route to managing the rapidly rising cost of medical care.
- Aslihan Asil, John Manuel Barrios, and Thomas Wollmann, “Misaligned Measures of Control: Private Equity’s Antitrust Loophole,” Virginia Law and Business Review, Fall 2023.
- Aslihan Asil, Paulo Ramos, Amanda Starc, and Thomas Wollmann, “Painful Bargaining: Evidence from Anesthesia Rollups,” Working paper, November 2024.
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