April 08, 2024

Warren, Markey, MA Delegation Urge FTC and DOJ to Closely Scrutinize Sale of Steward Physician Group to Optum

“We urge the DOJ and the FTC to closely scrutinize this acquisition, and oppose it if it would reduce competition and increase UnitedHealth’s market dominance.”

“We are committed to ensuring Steward’s hospitals remain open for the communities they serve. This proposed merger, however, does not guarantee they will stay open in the long-run, and in the meantime could lead to more expensive health care for vulnerable patients and create more opportunities for UnitedHealth to pad its profits with taxpayer dollars.” 

Text of Letter (PDF)

Boston, MA – United States Senators Elizabeth Warren (D-Mass.), Edward J. Markey (D-Mass.), and the entire Massachusetts delegation sent a letter to Lina Khan, Chair of the FTC, and Department of Justice Assistant Attorney General Jonathan Kanter, on UnitedHealth Group’s proposed acquisition of Steward Health Care’s physician group, Stewardship Health. The letter calls for FTC and DOJ to closely scrutinize the deal, and oppose it if it would drive up health care costs or reduce patients’ quality of care in violation of antitrust law. 

In recent months, Steward has faced “a deep cash crunch”  as a result of mismanagement by company executives and massive debts imposed by its former private equity owner, Cerberus. As a result, Steward has been unable to pay its vendors and is deep in debt, threatening hospitals in communities across eastern Massachusetts.  

“In Massachusetts specifically, nine of Steward’s hospitals are at risk of closure, which would have a devastating impact on communities across eastern Massachusetts. But Steward’s threat to close hospitals should not prevent DOJ and FTC from conducting a close and careful review of the proposed UnitedHealth acquisition,” wrote the lawmakers. “We are committed to ensuring Steward’s hospitals remain open for the communities they serve. This proposed merger, however, does not guarantee they will stay open in the long-run, and in the meantime could lead to more expensive health care for vulnerable patients and create more opportunities for UnitedHealth to pad its profits with taxpayer dollars.” 

Optum already has a stranglehold on the health care system as the largest employer of physicians in the country, counting more than 90,000 doctors in its network. In 2023 alone, UnitedHealth reported over $22 billion in profit, making it the largest and most profitable health care conglomerate in the United States.

“This stranglehold over U.S. physicians harms patients and doctors: by leveraging its massive market power, UnitedHealth can force doctors to limit networks, cut services, and see more patients per day to pad its profits, lowering the quality care of the more than 20 million patients that see Optum physicians,” the lawmakers continued.

UnitedHealth’s control of physicians, which will be expanded by this merger, also facilitates the company’s well-documented self-dealing. Indeed, UnitedHealth has made a business of acquiring distressed physician groups to expand their monopoly power. This merger would only expand their consolidation of the market and set the stage for more of this behavior.

“We have been encouraged by antitrust agencies’ efforts to tackle consolidation and wrongdoing in the health care industry, including by reportedly launching an antitrust investigation into UnitedHealth and suing U.S. Anesthesia Partners and its private equity parent company over alleged anticompetitive practices,” the lawmakers concluded. “Given the potential anticompetitive impacts of UnitedHealth’ acquisition of Stewardship health, we urge you to closely scrutinize this acquisition and oppose it if it would drive up health care costs or reduce patients’ quality of care in violation of antitrust law.”

Senator Warren has been leading oversight on Steward and has repeatedly called out the impact of consolidation on health care costs and quality of care: 

  • On April 3, 2024, Senator Warren delivered remarks at a Senate hearing in Boston titled, “When Health Care Becomes Wealth Care: How Corporate Greed Puts Patient Care and Health Workers at Risk,” which centered on Steward Health Care’s Massachusetts hospitals.

  • On March 26, 2024, Senator Warren released a statement about Steward’s plan to sell its physician group Stewardship Health to UnitedHealth Group’s subsidiary Optum.

  • On March 26, 2024, Senators Warren and Markey sent a letter to Steward CEO and Chairman Dr. Ralph de la Torre, calling on him to testify at a congressional hearing in Boston.

  • On March 8, 2024, Senators Warren and Markey sent a letter to Dr. de la Torre, blasting him for years of financial mismanagement, private equity schemes, and executive profiteering that have led to Steward Health Care’s financial crisis, which threatens to upend access to health care in Eastern Massachusetts communities and yank jobs from the health care workers employed at the company’s facilities.

  • On February 15, 2024, Senators Warren and Markey, along with all nine members of the Massachusetts congressional delegation, sent a letter to Cerberus seeking answers from the private equity firm for its role in creating the current financial challenges at Steward hospitals.

  • On January 29, 2024, Senator Warren released a statement about Steward’s financial situation and allegations of patient neglect at Steward facilities.

  • On January 23, 2024, Senator Warren led the Massachusetts congressional delegation in a letter to the CEO of Steward Health Care pressing the company to brief them on Steward’s financial position, the status of their Massachusetts facilities, and their plans to ensure the communities they serve are not abandoned. 

  • On October 4, 2023, Senator Warren and Representative Jayapal sent a letter to the Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC), urging them to carefully scrutinize UnitedHealth Group’s (UHG’s) pending acquisition of Amedisys. 

  • On September 19, 2023, Senator Warren and Representative Becca Balint (D-Vt.) led lawmakers in submitting a public comment letter to the Federal Trade Commission and the Department of Justice in support of the agencies’ proposed merger guidelines, including the guidelines’ focus on serial acquisitions of small health care providers by private equity companies that drive private equity market dominance in health care.

  • In June 2023, at a hearing of the Senate Finance Committee, Senator Warren raised concerns about how profiteering in Medicare Advantage (MA) is driving vertical consolidation in health care.

  • In March 2023, Senator Warren sent a letter to FTC Chair Lina Khan and Commissioners Alvaro Bedoya and Kelly Slaughter urging them to carefully scrutinize CVS Health Corp’s (CVS) pending acquisition of Oak Street Health, Inc (Oak Street).

###