PE Hospital Leasebacks Raise Antitrust Issues, FTC’s Khan Says

The common practice by private equity firms of buying hospitals only to sell off the real estate and lease it back to the facility raises potential competition concerns, Federal Trade Commission Chair Lina Khan said Tuesday.

While acknowledging that private equity provides an important source of capital for the health-care sector, Khan said selling assets to reap a quick profit and leasing them back is problematic since it weakens the company’s long-term viability.

Some private equity firms “take more of a strip-and-flip approach where they buy up the assets, strip those assets of value and then try to flip them ...