Introduction
On August 13, the President revoked Executive Order 14036 (EO 14036) “Promoting Competition in the American Economy”, a Biden-era directive that imposed enhanced federal review on industry consolidation, including the healthcare space. The revocation of the EO 14036 is expected to accelerate mergers among physician practices and ambulatory surgery centers (ASCs). Corporate and health-system ownership of ASCs has increased over the past decade, and major players like Tenet Healthcare Corp (NYSE: THC) are pledging hundreds of millions in annual ambulatory M&A investments. While consolidation could deepen patient intake channels and improve care coordination, it also risks squeezing margins and reducing competition in local markets.
Recent Antitrust in Healthcare
Although EO 14036 was revoked, the FTC has a history of reviewing physician roll-ups and breaking them up or adding additional checks. In 2024, the healthcare industry saw a number of antitrust cases including the following:
- The FTC v. Hackensack Meridian Health & Saint Peter’s Healthcare System (January 2024). The FTC sued to block the proposed merger of two major New Jersey hospital systems, securing a preliminary injunction on grounds that the deal would eliminate head-to-head competition and drive-up prices.
- The FTC sued US Anesthesia Partners (USAP) and their private equity backer, Welsh, Carson, Anderson, and Stowe as they alleged USAP engaged in anticompetitive acquisitions to suppress competition and drive-up prices for anesthesiology services across Texas.
These cases illustrate that while the regulatory environment has shifted, enforcement, especially in the healthcare sector, is far from absent.
Deepening Patient Intake Channels and Improving Care Coordination
The rollback of EO 14036 means smaller hospitals and ASCs can secure faster signoffs for transactions involving new service lines or facilities, allowing them to build broader patient networks without extended federal review. Quicker approvals for regional expansions enable providers and other organizations to combine hospital units, specialty practices and outpatient centers under one umbrella. Once a new entity is formed, through joint venture or sale, patients may benefit from improved care coordination.
Reducing Competition in Local Markets
Following the revocation of EO 14036, hospital networks and other healthcare entities can enter new markets and consolidate provider options which limits payers and patients’ choice. Although patient intake channels improve, independent providers face mounting margin pressures. With less federal antitrust oversight, consolidated systems gain leverage to negotiate higher facility fees, then pass cost pressures downstream to physicians and payers. Smaller rivals lacking that scale struggle to match escalated reimbursement rates, compressing their profitability.
Thirteen states, such as Minnesota and California, have transparency mandates which slow down new deals but do not prevent the inevitable exit of small independent physicians. As larger systems and private equity-backed platforms combine market share, local competition dwindles, giving consolidated entities leverage over insurers and regulators.
Conclusion
The revocation of EO 14036 marks a pivotal moment for healthcare consolidation. Hospitals, health systems, specialty practices, ASCs, and investors alike must balance the opportunities for growth and care coordination with the risks of margin compression and reduced competition. This evolving landscape underscores the importance of engaging experienced healthcare consultants who can assess regulatory risk, evaluate fair market value and compliance considerations, and design sustainable alignment models that support providers, patients, and investors.
As consolidation accelerates, those who take a strategic and well-informed approach will be best positioned to thrive in the new environment. If you have questions about how to navigate these challenges, please reach out to our team of experts here at Pinnacle Healthcare Consulting.
