Odd Lots - Lina Khan Is Sending a Message to the Private Equity Industry

Episode Date: November 16, 2023

Since becoming chair of the Federal Trade Commission, Lina Khan has arguably taken a novel approach to antitrust, one that incorporates broader ideas of what might actually constitute anticompetitive behavior. She's challenged huge tech companies like Amazon and Microsoft, and more recently, filed a lawsuit against a private equity firm that's been buying up anesthesiology companies across Texas. The action is noteworthy because it targets a common PE strategy of "rolling-up" multiple businesses and then consolidating them to eke out market efficiencies. So it's no wonder that PE players have called the FTC lawsuit "terrifying," or that Khan has been named "Wall Street's No. 1 enemy." In this episode, we speak with Lina Khan herself about the case, and whether the principles underlying it could be extended outside of healthcare to other industries with PE involvement. We also talk about political pushback, the FTC's research and examination process, and even... chickens.See omnystudio.com/listener for privacy information.

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Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg television, radio, and wherever you get your podcasts. Hello and welcome to another episode of the All Thoughts podcast. I'm Tracy Allaway. And I'm Joe Wisenthal. Joe, I think it's fair to say that antitrust is having a moment. It's been having a moment for a while. It feels like, especially under this administration, there is this sort of renewed energy and interest. Of course, I think last month or two months ago, we interviewed a conference. Jonathan Cantor.

Jonathan Cantor from the DOJ about it. But it wet our appetite and we want to do more. That's right. We do want to do more. And a lot of this renewed interest in antitrust and even controversy is down to Lena Kahn, the chair of the Federal Trade Commission, the FTC, who's been going after everything from big tech to private equity investments in the healthcare industry. And I'm very happy to say that today we do in fact have the perfect guest because we're going to be speaking to Lena Kahn. I'm very excited. Me too. I'm psyched. I've been looking forward to this episode for a long time. I'm thrilled that it's finally here.

Well, without further ado, Lena, thank you so much for coming on all thoughts. Thanks so much for having me. So I wanted to sort of dive in immediately into some of the most recent stuff you at the FTC have been doing. And you recently filed this monopolization claim against a PE-backed company that's been buying anesthesiology businesses in Texas. And I have to say, reading the suit, there's some unsettling stuff in there, particularly the bit where there's a guy from the company, which is called U.S. anesthesia partners, where they're buying another business and he's talking about how they can now raise their prices. And this executive goes, chiching, which, you know, I'm guessing you don't want to have written down in a lawsuit about raising prices and roll-up strategies.

But when you're filing a suit, you must love things like that. But, okay, here's my question. Why go after roll-ups in health care specifically? And could you theoretically go after private equity roll-ups anywhere? So just to zoom out, the FTC oversees markets across the economy, but that includes health care. And health care markets are some of the most important ones that we oversee precisely because this is not a matter of buying toasters or vacuum cleaners, right? This is essential health care. And in the United States, you know, we pay more for health care than any other country in the OECD, close to twice as average.

We pay around a fifth of our GDP and health outcomes are worse off, right? We see higher rates of infant and maternal mortality. We see greater incidence of death from avoidable diseases. And so overall, we see a whole set of problems that are stemming from a whole set of factors. The factor that's in our wheelhouse is looking at consolidation and a lack of competition. And so we enforce the nation's antitrust laws in hospital markets, in pharma markets. And we've been wanting to make sure that our enforcement efforts are really matching the realities of what we're seeing in today's markets. One of the trends that we've seen over the last decade is greater expansion of private equity in health care markets.

At the FTC, we're business model agnostic, but we have been hearing from a whole lot of market participants, including health care workers, about the ways in which private equities incursion can result in detrimental outcomes. There was a study that found that, for example, when private equity bought out nursing homes, that you saw higher mortality rates, right? So this is not even just about pricing, but it can really be life or death. So that's really overall what has stemmed our interest in taking a closer look at private equity and what ultimately led to the suit and the investigation. But what about in other industries? Is that something that you could theoretically also look at? Yeah. So we can look at, you know, businesses across the U.S. economy and how.

how they're structured and what their particular business model is can vary. We've been particularly focused on health care markets, but especially after we filed this lawsuit, we've been hearing from market participants across sectors about additional areas where they believe that, you know, we should be scrutinizing, be it in health care or elsewhere. So it's not against the law to raise prices generally. And it might be ill-avised and it might make lawyers cringe,

but it's also not against the law to write, to chiching in an email, you know, the game is to make money. What is it about this case that makes it to your mind anti-competitive beyond just profitable raising money? Yeah, it's a good question. So this case is about a roll-up scheme that was architected by the private equity firm Walsh Carson. And our lawsuit both names USAP as well as Welsh Carson because they were ultimately the core mastermind. And what happened was Welsh Carson recognized that the anesthesiology markets in Texas were quite fragmented, and that that created an opportunity for them to go in, do a whole set of acquisitions. They ended up buying out some of the largest anesthesiology practices in Texas in ways that eliminated competition, right? So you had a market that previously was fragmented where different anesthesiology providers were competing against one another, but ultimately when they were a whole bunch of them put.

but under the same ownership, that competition was eliminated. And we saw the effects of that pretty clearly because these entities were able to ultimately jack up prices. And so they did that in a whole set of cities across Texas. For the anesthesiology practices that they weren't able to buy outright, they ended up entering into all sorts of agreements either not to enter each other's markets or to coordinate and ultimately hike prices nevertheless. less. So there's a whole set of anti-competitive conduct that we allege was going on here,

and that's reflected in the whole set of antitrust claims that we bring, both illegal acquisitions, but monopolization as well as illegal market allocation schemes. One of the things I'm interested in, and we spoke a little bit to Jonathan Cantor about this, but how do you actually go about examining an industry? And how did these things actually land on your radar? Because when we're doing all thoughts, One of the things I think we've learned over the years is that even after we dive into a particular business for an hour, we often come away with more questions. And this leads to five more hour-long episodes about a single business. So what is your research process actually like?

And then also, I know you said you were going to be reaching out to doctors to try to get more stories about the impact of PE on the healthcare industry. But what are the types of things that you're hearing? So we have phenomenal staff at the FTC who are deep, deep experts. I mean, these are the people who are really drilling into the intricate mechanics of how various markets work. What are the contracting practices like? If you're looking at pharma, you know, drilling down into what is the active ingredient? What are like the drugs in the pipeline?

I mean, really just incredible mastery over just the nuts and bolts of all sorts of markets across the U.S. And so we really rely on their expertise. Beyond that, you know, we solicit information from a range of sources. One thing that I've been really focused on is making sure we're regularly engaging the broader public. And so we do these regular commission meetings where anybody can sign up and come talk to us. We've opened up a whole set of public dockets asking for information about certain types of contracting practices. We're doing an inquiry right now into pharmacy benefit manager. the PBMs, which are these middlemen in the pharmaceutical supply chain, we've been getting a whole set of comments from independent pharmacies to patient advocates. And so we really want to make sure that we are sourcing broadly and making sure those information gathering channels are open and really to make sure that our understanding of markets is really reflecting the reality. And, you know, this is actually how I got my start in antitrust as a business journalist and

researcher and one of my jobs was to really drill down and understand how various markets were faring, especially after decades of consolidation. And it was really that work and talking to market participants and understanding the reality and mechanics of their day to day and actually seeing how that departed from what some of the models and theories and antitrust were predicting that really gave me a renewed appreciation for actually talking to the people in these markets to understand what's going on rather than just relying on our models and theories. One thing I really like about when reading through the complaint against U.S. anesthesia partners, there's a really long conversation in there just essentially about

how the business model of anesthesia works and the relationship that the clinics have with the hospitals and how those arrangements are set. You know, something though I'm curious about reading this is no one knows what the outcome is. It seems straightforward. It seems like what we all think of as sort of, classical anti-competitive behavior. And the way you describe it is, yeah, they bought a bunch of regional clinics, got a big chunk of the market, and raised prices, which I think if you ask people what anti-competitive behavior looks like, it's something like that, garnering a big...

And then saying chiching. And then saying chiching. But the reason why I ask is that, you know, obviously, I think a lot of people associate your work with a sort of broader theory of antitrust related to corporate power and other ways that powerful corporate entities can affect employees or consumer or smaller businesses. Is it fair to say, though, that this is sort of retro old school antitrust or sort of a retro example of antitrust enforcement? I mean, everything we do is old school antitrust in the sense that we're never like acknowledged that there's some new thing, but it just feels, it does not feel like some exotic or some sort of trendy legal theory. Yeah, so look, the interesting thing about antitrust is that our foundational statutes are over 100 years old, right? The Sherman Antitrust Act was passed in 1890. You then had the Clayton Act, the FTC Act, which created the Federal Trade Commission in 1914. And these laws set out terms like unfair methods of competition or restraints of trade. And at various points, lawmakers had debates. They said, should we define more specifically what that means? And they decided against it because they realized,

that as markets change, as technologies change, as business models change, firms are going to be endlessly innovative in how they monopolize, right, the tactics that they use. And so they left it open-ended for enforcers to use their expertise, to do deep investigations and make sure that those principles were being vindicated, no matter whether you're in a smokestack industry or in the context of private equity or in the context of some of these newer digital markets. And so those are really the principles that were animated by and that we look to vindicate throughout our work. Well, let me just ask as a follow-up. I mean, presumably, as you said, you're collecting more comments, you're looking at more areas, et cetera. Is there anything in this particular case

that was anti-competitive, but not in this sort of straightforward garnering market share and raising prices? In other words, are there other types of roll-ups, perhaps in health care, perhaps other parts of other things that private equity might engage in, where this case could serve as a warning, even if the strategy isn't about, oh, let's get 70% of the market and raise prices. So this is the first roll-up case that the FTC has brought in several decades. And what I mean by that is that this case was about not just looking at each acquisition in a silo, but really looking at them in the aggregate, right? And that's really what we see with some of these roll-up and serial acquisition strategies is that they may be composed of a whole set of individual transactions and acquisitions.

Each one, when considered in a silo, may not seem problematic from a competition perspective, right? Some of them may not even be reportable because they may be, you know, just a few tens of millions of dollars and not even trigger the hearts got Redino filing. And so you may have a series, each one of which is small and may seem benign, but when you zoom out and look in the aggregate, what you may have seen as a roll-up of a market. And so this case should really put market participants on notice that the FTC is going to be looking at these deals in the aggregate.

We're reserving that right for ourselves, rather than just looking at each one in a silo. Well, on that note, when I think of roll-up strategies, I think of them as kind of a foundational aspect of private equity, And I think it's fair to say that there are a lot of, you know, PE decks that go around where they talk about multiple acquisitions and the ability that gives them in pricing power. So I guess it's unsurprising that you have seen some pushback and some lobbying recently. I think Politico just this week or last week ran a story calling you Wall Street's enemy, number one, something to that effect. And we have seen businesses trying to use political partisanship to persuade.

some politicians to maybe repeal some of these laws or kind of push back against them. How does that impact what you do? And I guess how vulnerable are some of the directional shifts or changes that you've made at the FTC to this type of political pressure? Look, embedded in the DNA of the FTC is when, as an agency, we're being faithful to the statutes, right? The anti-monopoly statutes, we're going to be pitted up against monopolies and very well-heeled interests, right? And these entities have power, they have resources, and they have a lot to lose if the antitrust laws are faithfully enforced. And so, you know, that type of pushback is probably baked in if we're doing our job and being effective. The important thing, though, to recall is that

the business community is not a monolith, right? And we've been hearing equally from businesses, from entrepreneurs, from startups, about the ways in which consolidation and anti-competitive practices are locking them out of markets, are muscling them, or squeezing them. We heard a lot from independent pharmacies, for example, about the ways in which vertical integration by PBMs may be leading to practices that is squeezing them, and especially in rural areas where you have some of these independent pharmacy shutter, that's essential health care. longer being provided to communities. The other week, I spoke to a conference of ER doctors who shared the way in which private equity expansion into emergency medicine, they believe, is really harming

not just the doctors, but ultimately the quality of patient care. And so these are real problems with real material effects on people. And so that's where making sure that we're hearing broadly and not just from, you know, well-heeled companies that can afford lobbyists in D.C. is really, critical and make sure that we're keeping our eye on the prize and faithfully doing our jobs. This is Tom Keene, inviting you to join us for the Bloomberg Surveillance Podcast. It's about making you smarter every business day. I'm Paul Sweeney. We bring you complete coverage of the U.S. market open. We cover stocks, bonds, commodities, even crypto, all the information you need to excel.

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On the East Coast, listen at lunch. And on the West Coast, listen as soon as you wake up. That's the Bloomberg Surveillance Podcast with Tom Keene, Paul Sweeney, and me, Alexis Christophorus. Subscribe today, wherever you get your podcasts. silence, essential listening, each and every business day. I'm glad you brought up the potential harm to doctors and obviously the quality of care. There was an interesting article I read, I guess it was just yesterday in the American prospect,

about the AMA considering a resolution for a federal ban on the corporate practice of medicine. And I guess, you know, I want to go back to what you said about, I think it was in the first question, about listening to more people and opening up comments. Are you hearing the same thing to sort of frustrable? from doctors, and could the FTC, in theory, take action at some point in the future against an entity that wasn't necessarily aggressively raising prices, but by dint of their having rolled up multiple clinics are mistreating workers or mistreating patients? Like, could that be enough? So the antitrust laws protect everybody. They protect patients and consumers, but they're also

supposed to protect workers. And we've seen over the last decade, in particular, significant empirical research from labor economists, finding that labor markets in the U.S. are much more concentrated on average than previously believed, and that you have what's called monopsony power that can give employers outsized power over their workers when they're not checked adequately by competition. So that's a dimension of competition, labor markets, that we are very much looking at. The revised merger guidelines that we put out a draft of this past summer includes a particular guideline laying out how we will assess whether mergers may unlawfully lessen competition in labor markets. And one of the hospital mergers that we sued to block last year in Rhode Island included

analysis about how the merger would be bad, not just for patients, but also for registered nurses. So it's becoming, you know, more and more key part of our analysis. Earlier this year in January, the FTC also brought a series of enforcement actions relating to the use of non-compete clauses. So we brought one lawsuit against this company called prudential security. It had been employing security guards that were making close to minimum wage. And it had imposed on them these non-compete clauses that we alleged were coercive and unfair methods of competition. We also brought a set of cases in the glass manufacturing industry. This is a part of the market that's quite concentrated. You basically have three big players. And we alleged that their use of non-competes had not

even just been bad for workers, but it actually harmed competition. Because if you had an upstart who wanted to enter the market, they believed that was, you know, excess demand that they could come in and fill, they wouldn't be able to scale ultimately because the relevant talent pool was all locked up through these non-compete. So that's becoming a greater part of our work. In January, we also proposed a rule that would eliminate non-compete clauses in employment contracts for the vast majority of workers with a couple of exceptions. And that, again, was stemming from a whole set of empirical research that found that non-competes may be depressing workers' wages to the tune of $300 billion a year annually. One thing that was very interesting to me was that, you know,

you can imagine how the non-compete may be bad for the worker that's directly covered by the non-compete. But interestingly, they also have a negative effect, even on workers who are not directly covered, which kind of makes sense, right? If there's less churn in the economy because workers are locked in by a non-compete, that means there are fewer opportunities, even for workers that are not covered by non-compete. So we found harm to workers. We also found harm to competition and to innovation. And so this is another area of our work where we're looking at product markets, but we're also looking at labor markets. Tracy, that's interesting about the non-competes. It's almost like the corollary or flip side to what we've talked about recently.

workers getting wages even if they're not in the union from wage gains. So what may affect just sort of one subset of workers has a broader impact on that. Oh, totally. Also, can I just say ever since the 2018 Jackson Hole, I get really excited whenever anyone says monopsony. So thank you. We need an air horn to go off whenever I guess there's monopsis for Tracy. But I mean, just on this labor issue point, I mean, this is where we're sort of getting into the part of the idea of hipster antitrust or sort of moving away from more traditional or classical interpretations of it. And you know, you're obviously the expert and correct me if I'm wrong, but my impression is that a lot of this is untested in courts. And as you just pointed out,

on the non-compete clauses, that, you know, you could maybe fix some of this through new rulemaking, but otherwise you're going to have to pursue it through legal channels. So what exactly is the argument there. Like, how do you get the courts to incorporate this idea into existing law? So the idea that antitrust laws protect everybody, including workers, including competition and labor markets, is entirely accepted by the courts. There was a few years ago a Supreme Court decision NCAA v. Alston relating to student athletes, where the court, you know, reaffirmed the idea that antitrust laws protect competition on the whole set of sides of the market. And just recently, the Justice Department prevailed in a case that they brought against publishers that were seeking to merge.

And one of the arguments they advanced there was that that merger would have depressed the payments that are made to authors. And so they, again, were looking at, you know, sides of the market other than end consumers. And, you know, there, again, that idea also prevailed. So, you know, I believe we're, you know, returning to faithful interpretations of the law, which are accepted by courts. And on, you know, the non-compete side, for example, a lot of the comments that we've gotten are also from health care workers. And so something that we heard, for example, was that the use of non-competes during the pandemic really impeded the ability of physicians to move. And this was a moment in time where, you know, you had outbreaks at different cities and different regions. And so doctors and healthcare workers wanted to be mobile, right?

They wanted to be able to go where COVID was really breaking out. And they found that they weren't able to move easily. And in some instances at all, because of these non-competes. And so you see, again, in a very real material way, how this is not just about abstract debates with, you know, various labels tacked on, but really just, you know, real life impact. I have what is kind of a philosophical question that I've been thinking about a lot since we interviewed your sort of counterpart over at the DOJ. You know, when I think about the broader economic agenda of the Biden administration, you know, and many commenters have talked about this, this sort of turn away against sort of neoliberalism, turn away against the sort of assumption that the market is best. And so we have these big subsidies that are going toward the big domestic agendas. And some could even say we're picking winners and picking losers in a way.

And yet, thinking about your antitrust work, you know, competition always seems like a good thing. it is like mom, apple pie, the American flag in competition. Like, no one's against competition. But I wonder like how it fits in this sort of economic moment in which policy seems to be moving in other realms away from the market knows best. And so you're sort of pursuing this idea that competition is this sort of per se good or sort of a North Star to pursue at a time when a lot of the economic policymaking seems to be skeptical, a lot of traditional ideas of what makes a good market. So antitrust and competition policy is really about setting the rules of the market, right? Antitrust and the FTC Act are really about distinguishing between fair and unfair methods of competition, right?

So are you able to compete by burning down your competitor's storefront, right? Are you able to compete by engaging in certain types of exploitative or predatory practices or just buying out all of your rivals? No, I mean, those are unlawful means of competing. There are other means of competing that are entirely lawful, right? Investing in your, you know, facilities, investing in your workers, developing real operational efficiencies. I mean, these are all mechanisms of competing that are fair game. And so that's really where antitrust fits in. I think one area where you do see some analogs between some of the, you know, rethinking that's happening is where,

we are revisiting some of the core assumptions that started to be baked in in stay, the late 70s and 80s. And in antitrust, those assumptions were really around the idea that monopoly power would generally be fleeting because if a monopoly tried to exercise its power by, say, raising prices, you would immediately see this flood of new competitors that would come in and discipline away that monopoly power. And there was this idea that, you know, there's always uncertainty. And so in the face of that uncertainty, the government should err on the side of being hands off because government inaction that erroneously allowed monopoly power to flourish would be disciplined and fixed by the market, whereas government errors on the side of

enforcing the law would be much stickier and difficult to get new legislation passed or, you know, court rulings overturn. And so that basic, what it's known as kind of the error cost analysis that like, when in doubt, government should stay out and not do anything was kind of baked in. So the approach the agencies took to, you know, a whole set of court decisions. And that's really but what's being revisited. This idea, this whole set of, you know, neoclassical assumptions baked in that just say the market will self-correct. And, you know, the Biden administration through the executive order, and the president actually even said in his speech, you know, we've been living for 40 years under this natural experiment. And the signs are all around us that this natural experiment.

and has failed. We see too little competition in all these sectors. Americans are paying more. They're making less money. We're seeing innovation decline. There are all these material harms. And so that's where we need to reinvigorate. We need to dispel with this notion that the best antitrust is no antitrust and we actually need to faithfully enforce the laws. This is Caroline Hyde. And I'm Ed Ludlow inviting you to join us for Bloomberg Tech, a daily podcast focusing exclusively on technology, innovation and the future of business. Every weekday, we bring you the top headlines from the world's biggest tech companies.

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That's the Bloomberg Tech podcast. I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco. Subscribe today wherever you get your podcasts. Joe, remind me to tell you about my first experience with American health care. Okay. When we do the outro, you can talk about it. But just on this point, you know, some of the criticism that we've seen, and I really,

I hate to keep quoting headlines from competing media outlets. But for instance, there was a Wall Street Journal op-ed that had a very unsubtle headline of Lena Con blocks cancer cures. And I guess the question is, you know, the argument there is by making people think twice about investing in certain medical businesses, maybe you're cutting off a source of capital for a very capital-intensive industry. It takes a lot of money to research new medicines, new treatments, build new facilities, or whatever. So how do you balance the need to fund new and innovative medical treatments? In other words, the need to get money into this industry with the desire to ensure fair and competitive markets. So look, we always consider every particular deal on its specific facts on a case-by-case basis.

I believe the merger that that op-ed is referencing was actually voted out before I even arrived at the FTC on a unanimous basis. So I think sometimes there's a desire to over-attribute to me. But look, I think, you know, in the pharma space, for example, we often hear arguments that, oh, the only way for commercialization is to have, you know, the big pharma companies buy out the small pharma companies. And I think we've seen in practice that you want to be able to maintain more exit opportunities. And so, you know, even if you're talking about an existing monopolist, buying out a new pipeline drug that could be a direct. direct competitor, we think that's bad, right? And there's research showing that we've seen what are known as kill our acquisitions in the pharma space in particular, where you have these buyouts and ultimately the acquiring firm shuts down what was, you know, a pipeline drug or an existing

area of R&D because it risked cannibalizing some of their existing drugs. The FTC also brought a lawsuit this summer against Amgen's acquisition of Horizon. And there we were really building on the fact that Amgen had a history of engaging in some of these exclusionary cross-bundling tactics, where they would use their existing portfolio of blockbuster drugs as anchors to secure more favorable treatment or placement by PBMs for some of their non-blockbuster drugs, and that that could have a real exclusionary and anti-competitive effect in ways that, again, is about ensuring that Americans have more affordable access to health care. And so, you know, the Horizon drugs that they were buying,

Kirstexa and Tepeza, these are addressing, you know, special types of gout illnesses, a special type of thyroid illnesses. These are drugs that cost, you know, anywhere from $400,000 to $600,000 for a six-month treatment. And so whether an acquisition is allowing a firm to fend off new arrivals, fend off, you know, generics or biosimilers from the market and keep prices high has a real material effect on people. And so that's why we take, you know, enforcement. in these areas so seriously.

Just going back real quickly to the lawsuit that we started the conversation with, the actions that you are alleging were engaged in by USAP and they're backing PE from Welsh, Carson, Anderson, and Stowe. Is it your belief or is it your sense that the basic playbook that they used is not confined to them, that there are many of these essentially same strategies that have been employed, maybe in anesthesia or other realms within health care around the country that at some point may be worth looking into? Or is it?

How unique? Yeah, I mean, we wouldn't want to prejudge anything before, you know, actually doing a real investigation. But I will say, both after this lawsuit, we've started hearing a lot from, you know, healthcare workers and doctors and folks in health care who are pointing to other specialties in particular that they believe have similarly been rolled up, potentially unlawfully. We also, when we put out our draft merger guidelines, we got thousands and thousands

of comments. A lot of those also from healthcare workers, again, identifying areas where they believe we may have seen serial acquisitions or roll up. So based on what we're hearing from the market, it certainly seems that this might not be an isolated strategy. Does the FTC have to win its suits to be effective? Or, you know, is the threat of legal action in and of itself a deterrent to monopolistic practices? Or if companies see the FTC losing in court, do they become more important? bolden. So look, we only bring lawsuits where we believe there's a law violation and we bring lawsuits because we want to win. One area where I've been really pleased with our impact is deterrence. Right. As a law enforcer, you want to make sure that firms are not engaging in law violations in the

first place. And one thing we've heard from, you know, senior deal makers, senior antitrust lawyers, is that even a few years ago when there were initial deal discussions, antitrust risks, would not be among like the list of things that would initially get discussed, right? It might come up in the middle of the deal or more often at the very end. And these senior dealmakers are acknowledging that that's totally changed, right? Antitrust risk is now talked about at the very beginning. And as an enforcer, you want entities to be thinking about how do we not break the law, right? That's good for enforcement.

It's good for taxpayers. And so from a deterrence perspective, we're quite pleased and happy and think it's reflective of a functioning law enforcement system and a rule of law system to make sure that entities are thinking about that type of risk initially. So no more putting to Ching in company presentations, I guess. But wait, when you say that these antitrust concern is happening very early on in the conversation among dealmakers, where is that being aired? Does that something people are telling you? Is that something people are writing about it? How do you actually see that? So we've had people tell us that directly. We've also seen, you know, senior heads of divisions of

investment banks go on TV. and, you know, share that quite publicly. I have just one more question, and it's an extremely important one. And listeners of this podcast know that whenever there's an opportunity to bring chickens into the conversation, I will seize on it. Joe and I heard that you might have a background in poultry. That's right. So I got my start in antitrust, in part as a business journalist, and one of my first assignments was to look at the poultry market. The poultry market is an area where we've seen significant consolidation.

over the last few decades. And so you have millions of consumers, you have thousands of farmers, but they're all just connected by a very small number of chicken processing companies. And, you know, we've heard a lot over the years from chicken farmers about how this market may be enabling coercive and potentially anti-competitive practices. We've also seen empirical research suggesting that consumers are paying more, chicken farmers are making less. And so it may be the companies in the middle that are just taking a bigger and bigger share. Tracy, if being a journalist is a stepping stone to this, then maybe one day this could be one of us. This is a very motivational discussion.

Very much so. I need to do as well as Lena Kahn. Okay. Well, Lena, that was amazing. Thank you so much for coming on odd lots and explaining the way you're thinking about antitrust at the moment. Thank you. Well, so nice to meet you both. You're kind of like legends and podcast world.

Oh, I love it. Producers. Are you still recording? Joe, that was fun. any conversation that includes both monopsony and chickens, I am a major fan of. That was a great conversation. There were so many interesting aspects. I mean, one thing that I really appreciate, and I said it, and it really comes through in the complaint against USAP, and it makes sense. I mean, lawyers aren't just going to bring a case without understanding the industry,

but the sort of details about how these industries really operate and the different business models there. And I can only imagine, I don't know, the tip line that they must be getting flooded with at the FTC of frustrated doctors and frustrated healthcare workers as they watch, you know, themselves working for larger and larger corporate entities. Well, I kept thinking maybe FTC staffers would make really good all-thoughts guess. I wonder if they would come on and talk about, you know, how they're thinking about specific industries. You know what I do think we should definitely get? I mean, A, yes, but B, I think this corporate practice of medicine, I mentioned there's this really good, I'm. mentioned it by Motajic at the American Prospect. You know, the AMA for years,

one of their big things was sort of fighting against socialized medicine and things like that. And now they're complaining about corporatized medicine. And so what is it like to be a doctor in the year 2023 versus, I don't know, 1993 as these large private equity firms and other large corporations or your bosses would sort of be a very interesting episode, I think, for us. Absolutely. And I'd be really interested in it. I have a confession to make, which is I still don't understand how U.S. healthcare works at all. Like, it is just massively confusing. My plan is to never get sick, never have to go to a doctor or a hospital ever, because I can't figure it out. Yeah, you literally can't. So I recently, this summer, I had a minor, it was a weird leg injury. It was fine. But I went to this hospital. It was fine, and they took care of it in a day. And then I got a bill, and the bill was actually not that big.

But in my mind, the bill could have been anywhere from $75 copay to $20,000. And I would have had no idea at any point what I was going to pay. It was just sort of a miracle. But how would I have any idea? And I just think that you just sort of enter in randomly to the U.S. healthcare system and then it feels like you're rolling day. Well, this is what I wanted to mention. So the first time I came to the States as a sort of working person was 2012, I think.

and I went to get a prescription for a medicine that I had gotten for free for more than 10 years in the UK. And I left with an $800 tab as an insured person. And it took months to sort it out with insurance. And I was so shocked that, A, this could even happen and be that because of the way the U.S. healthcare system worked, that it was suddenly incumbent on me to make a billion phone calls to both the insurance companies. and the doctor to argue about this fee, it just blew my mind. So one thing, again, in this complaint against USAP, there's this whole conversation, and it's sort of wild to think about that you could go into a hospital. The surgeon could be in your network and insured, and you don't even think, oh, but what if

the anesthesiologist, who you just think is part of the package, right? You don't really think, oh, I'm getting, I mean, you don't, you don't competition. You have no idea. Well, the classic example is also if you get run over in the street and you're unconscious, you have no say in what hospital they're bringing you to. I mean, there's a lot to do with what a mess this is. So I do think that from a broader macro priorities of the United States standpoint, it is a belief that I have is we would be very good if we could just continue to pursue

general exploitation and grift within the industry. No, I totally agree. That would be a good goal. And if antitrust enforcement is one way to pursue that, then that's great. Right. And this kind of gets to Lena's point about we've had decades at this point to illustrate that some aspects of the system aren't really working. And certainly my experience would would tally it with that. But anyway, we could go on and on about health care disasters for hours. But shall we leave it there? Let's leave it there. All right. This has been

another episode of the Oddlots podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Joe Wisenthal. You can follow me at the stalwart. Follow our guest, Lena Con. She's at Lena Khan FTC. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashel Bennett at Dashbot, and Kel Brooks at Kel Brooks, and thank you to our producer, Moses Ondom.

And for more Odd Lots content, go to Bloomberg.com slash Odd Lots. We have transcripts, a blog, and a newsletter that comes out every Friday. And I'm sure there will be a lot of conversation about this episode in the OddLods Discord chat 24-7 with fellow listeners, discord.gg.

and if you enjoy odd lots, if you want us to do more on the medical and healthcare industry, then please leave us a positive review on your favorite podcast platform. Thanks for listening. Hello, I'm Michelle Hussein, and for more than 20 years, I was at the BBC. But all the time I was delivering the headlines, I wanted to go further than the news of the day, to spend more time with the people shaping our world. And that's, That's what I'm doing here on this podcast. Speaking to people from Nigel Farage, Russia needs to be taught a lesson,

to tech journalist Karaswisher. And the tech industry is running wild. You know, they've gotten what they wanted and they've seen a huge run-up in their stock prices. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe

to the Michelle Hussein. show from Bloomberg weekend wherever you get your podcast. You certainly ask interesting questions.