Provider ownership models under scrutiny

Class-action lawsuits and congressional inquiries put healthcare deal-making in the spotlight

Aclass-action antitrust lawsuit was filed Aug. 10 in North Carolina alleging that HCA Healthcare acquired Mission Health to secure monopoly market power and inflate prices.

The suit, filed in Buncombe County, was brought by six western North Carolina residents who claim HCA used “all-or-nothing” negotiation tactics with insurers, leading to higher prices and insurance premiums in lopsided acute-care markets in North Carolina’s Buncombe and Madison counties. The plaintiffs, for instance, said HCA’s charges are more than double the state average for a cesarean birth without complications.

HCA will respond through the legal system when the Nashvillebased company is served with the lawsuit, the health system said in a statement. The company noted that it spent more than $330 million in charity care and uninsured discounts in 2020, expanded hospital services including the opening of the North Tower at Mission Hospital in Asheville, N.C., and a new pediatric emergency department, and securing land for a new 120-bed behavioral health hospital.

HCA acquired Mission Health, a former not-for-profit system based in Asheville, for $1.5 billion in 2019. The North Carolina Attorney General’s Office conditionally approved the deal with stipulations. Under those terms, HCA is required to maintain a similar set of services at the newly acquired hospitals for at least 10 years, build new facilities in the state including a behavioral health hospital and support Mission Health’s community service programs.

And in Washington, D.C., the Senate Finance Committee launched a probe into the private equity ownership of hospice provider Kindred at Home.

Chairman Ron Wyden (D-Ore.) and Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) are leading a review of quality of care and the influence of investors on the Westbury, N.Y.based company’s operations, saying they are “concerned that when applied to hospice care, the private equity model of generating profit on a rapid turnaround can occur at the expense of dying patients and their families.”

The company plans to cooperate fully with the Senate committee’s investigation, a spokesperson said. “At this time, it is not appropriate to comment further or provide any additional information or details,” the spokesperson said.

Humana, one of the nation’s largest health insurers, partnered with private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe to purchase Kindred Healthcare for

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$4 billion in 2018.