The hospital lobby pushed back against the president’s executive order.
The American Hospital Association said hospital mergers already are subject to an “enormous amount of rigorous scrutiny” from federal and state regulators.
The lobby pointed the finger at the insurance industry, and urged the administration to focus its efforts there instead.
The Federation of American Hospitals, which represents for-profit hospitals, also balked at the administration’s order, characterizing it as “misguided,” and said “excessive antitrust enforcement action” will not guarantee rural Americans access to care.
Dive Brief:
- * President Joe Biden on Friday announce he would call on the Department of Justice and Federal Trade Commission “to enforce the antitrust laws vigorously” in healthcare and other key industries. The White House said it’s urging antitrust regulators to recognize that “the law allows them to challenge prior bad mergers that past Administrations did not previously challenge.”
- * The executive order instructs antitrust regulators to “review and revise” their merger guidelines to ensure patients are not harmed by a potential tie-up.
- * The rule also directs HHS to finish implementing rules on the surprise billing ban, continue to support price transparency efforts and standardize health plans on the Affordable Care Act marketplace to make it easier to comparison shop.
Dive Insight:
Consolidation in healthcare is a persistent issue as mergers and acquisitions have continued at a steady clip for years, with a slew of research finding the unions lead to higher prices.
Biden’s executive order notes that lack of competition in the healthcare market can lead to price increases without improving quality of care.
“Thanks to unchecked mergers, the ten largest healthcare systems now control a quarter of the market,” the release from the White House said, citing research from Deloitte.
So far this year, there have been 27 health system mergers and acquisitions, representing total revenue of $17.2 billion. Although the number of deals are below last year’s levels, the deals are larger, according to the latest report from consultancy Kaufman Hall.
Although the executive order calls on regulators to make the healthcare industry a priority, the FTC has signaled it is already doing so in various ways.
Earlier this month, the FTC said it is prioritizing healthcare as part of its enforcement strategy over the next decade. After a vote of the commissioners, the agency agreed to focus on a number of key sectors, including technology companies and healthcare, which includes hospitals, pharmacy benefit managers and pharmaceuticals companies.
Last year, the FTC said it was expanding its retrospective merger review program to consider and research new areas of study that could ultimately help the agency police future deals.
The price transparency rule requiring hospitals to publish some of the rates they negotiate with insurance companies went into effect at the beginning of this year, but various reviews have found most hospitals are not complying in full. The penalty for noncompliance is $300 a day, which researchers have said may be too low give the requirement teeth.
The executive order also tackles prescription drugs, calling on regulators to ban “pay for delay” arrangements, and instructs the FDA to work with states to import drugs from Canada.