The Positive Impact of Physician Practice Consolidations on 3D Printing Innovation Amid FTC Examination

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3D printed medical devices [Source: Formlabs]

Charles R. Goulding and Preeti Sulibhavi consider the FTC’s investigation into Welsh Carson and the importance of 3D printing’s value-add as a resource.

Lina Khan, the activist head of the FTC has made it clear that she wants the agency to move against private equity physician practice roll ups. We recently covered the 3D printing related benefits of these physician practice roll ups. Numerous categories of physician practice roll ups are currently experiencing rapid growth.

The FTC selected as its first case the Welsh Carson, Anderson & Stowe (Welsh Carson) private equity firm’s roll up of the majority of anesthesiology practices in Texas. The Welsh Carson firm now has ownership of 60 percent of the Texas anesthesia market. Welsh Carson also has ownership shares in radiology, orthopedic and primary care groups.

Typically, enforcement agencies like the FTC choose cases with extreme facts to achieve the desired business behavior changes. Ms Khan frequently speaks on major media outlets, effectively publicizing the agency’s action geared towards achieving the FTC’s policy goals for changing business behavior.

The hurdle in the situation of private equity roll-ups is that PE firms have increasingly concentrated on enhancing operational performance, which is often required in the area of physician practice. There have been staffing deficits at all levels within physician practices, and there is also a need to incorporate various technologies, such as 3D printing, into their practices. Managed care facilities purchasing physician practices usually possess financial resources, staffing levels, and share technology centers that smaller physician practices are unable to provide.

Notable managed care practices that acquire physician practices while offering thorough technical resources include Northwell on Long Island, The Mayo Clinic in Minnesota, and Kaiser Permanente on the West coast. These larger health systems possess the scale and resources necessary to invest in emerging technologies such as 3D printing, which hold the potential to enhance patient outcomes but necessitate significant initial costs.

Northwell Health, for example, has brought 3D printing capabilities to its entire system, leveraging the tech to produce anatomical models for preoperative planning in various specialties, like cardiology, neurology, and orthopedics. These highly precise 3D printed organ models enable surgeons to meticulously plan complex operations beforehand, thereby enhancing outcomes. Northwell further incorporates 3D printing in fabricating customized implants, prosthetics, and surgical tools adapted to the unique anatomy of individual patients.

Mayo Clinic operates one of the most progressive 3D printing programs in the US. Its headquarters in Minnesota houses dozens of printers, collectively generating over 85,000 3D printed models annually. Mayo employs 3D printing for aiding complicated neurosurgical planning, creating tailor-made orthopedic implants, mimicking intricate cardiac anatomies, and crafting advanced splints and castings uniquely fitted for each patient. Such a level of customization and personalization facilitated by 3D printing yields better surgical outcomes.

However, smaller independent physician practices find it challenging to avail of advanced technologies, such as 3D printing, owing to the steep equipment costs and specialized staff requirements. Larger healthcare systems acquiring them can grant these community-based practices easier access to such emerging tools, thanks to their dedicated innovation budgets and shared resources.

Nonetheless, the FTC is concerned that the excessive unification of doctors’ offices under a few large health services or private equity firms might facilitate anticompetitive conduct and higher costs. Both perspectives have valid points. While more significant consolidated services can lower prices through economies of scale, excessive market concentration could harm pricing.

The Study and Improvement Tax Incentive

The enduring Research and Development (R&D) Tax Credit is accessible for entities evolving new or enhanced products, procedures, or software.

3D printing technology could enhance a company’s R&D Tax Credits. Salaries for technical workers who create, test, and revise 3D printed prototypes can be factored in as a percentage of eligible time spent for the R&D Tax Credit. Similarly, if used as a means to enhance a procedure, the time spent incorporating 3D printing hardware and software is considered a valid activity. Lastly, if used for modelling and preproduction, the costs of filaments used in the development process might also be recovered.

Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.


In conclusion, the FTC’s action against Welsh Carson may or may not have merit. Other private equity firms rolling up physician practices should take extra effort to explain the value-add they intend to bring to the deal, with expanded 3D printing resources as one key component of their integration strategy. They should also be cognizant of avoiding too much market domination in a particular specialty or region.

There are positives and potential pitfalls with increased consolidation of physician practices that both the FTC and private equity firms need to consider as this rapidly accelerating trend continues nationwide. Careful analysis is required to strike the right balance between integration efficiency and maintaining market competition.

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