Ex-FTC Chair Lena Khan says regulators need to scrutinize private-equity firms

Former Federal Trade Commission Chair Lena Khan said U.S. may face “catastrophic consequences” if antitrust officials in the Trump administration don’t regulate private-equity firms that have been acquiring large parts of the economy, the Financial Times reported Sunday.

Khan reportedly said in an interview that private equity is a threat to the American healthcare system.

 Due to “the stake of our healthcare markets, it’s extraordinarily important that we are staying vigilant here,” she was quoted as saying. “If enforcers want to decide that they want to look the other way, that’s going to have, I fear, catastrophic consequences for Americans.”

Khan said so-called roll-ups in which firms buy and combine companies in the same sector or “strip and flip” them, which frequently leave the businesses weakened and indebted.

“I heard a flood of concern from healthcare workers, from ER doctors . . . about the private equity roll-ups that were resulting in worse quality care, higher prices,” Khan was quoted as saying. “These are just market realities that are not going away,” she added.

Some cases involving private-equity firms in the healthcare sector before the regulator did not end by the time Khan left the job on Monday. She said some firms were attempting to get more favorable outcomes from the new Trump administration.

“This type of jostling is something that we’re all seeing in clear display,” Khan reportedly said.