Healthcare Competition and Consolidation
Medicare Advantage and Consolidation’s New Frontier — The Danger of UnitedHealthcare for All (New England Journal of Medicine)
Hayden Rooke-Ley, Soleil Shah, and Erin C. Fuse Brown
This article describes the recent ransomware attack on Change Healthcare and the ownership structure of UnitedHealth Group, including how much market power it has with medical claims, data analytics, insurance, physicians, PBMs, pharmacies and a bank. The authors note the risks involved in these types of conglomerations, including market abuses that raise costs, erode quality of care, and harm physician morale. The article mentions tools that exist for policymakers and regulators to address this type of consolidation, and has specific recommendations for Congressional action. Ultimately, the authors express skepticism about the promises of vertical integration, and push for an alternative structure for the healthcare economy.
Reconsidering the Ban on Physician-Owned Hospitals to Combat Consolidation (Policy Commons)
Brian J. Miller, Matthew C. Mandelberg, Michael H. Smith, Jesse M. Ehrenfeld
The article focuses on how competition in healthcare markets is harmed by hospital and provider consolidation, stating a belief that physician-owned hospitals are a way to create innovative alternatives to this consolidation. The Affordable Care Act put a ban on growth and expansion of physician owned hospitals; the authors observe the harm this caused to healthcare competition and the potential benefits of relaxing the ban. The authors also propose narrowly tailored policies that would address concerns about physician ownership without requiring an outright ban. The paper recommends Congress remove the ban on these hospitals, while adding narrow policies to deal with said concerns.
Who Pays for Rising Health Care Prices? Evidence From Hospital Mergers (National Bureau of Economic Research)
Zarek Brot-Goldberg, Zack Cooper, Stuart V. Craig, Lev R. Klarnet, Ithai Lurie, Corbin L. Miller
While it has long been established that hospital mergers result in increased prices, the authors go a step further and look at the effect of these increased prices throughout the economy. The higher prices caused by mergers lowers wages and employment at firms outside of the health sector and increases unemployment insurance payments. The increase in healthcare prices are also linked to an increase in deaths from suicides and overdoses. The authors’ stated goals include motivating the development of strategies to address health care price growth in the US and ways to screen for and challenge hospital mergers that lessen competition and lead to higher prices.
Regulation of Healthcare and Healthcare Entities
Supreme Power — The Loss of Judicial Deference to Health Agencies (New England Journal of Medicine)
Rachel E. Sachs, Erin C. Fuse Brown
The authors analyze the recent Supreme Court overturning of the Chevron doctrine, and what it could mean for health agencies, including increased litigation and regulatory uncertainty for the healthcare industry. The authors believe the reduction of expert authority power over healthcare will result in heightened risks to public health and patient safety. Wealthy industry powers will have incentives to challenge every unfavorable rule, as courts claim greater authority for themselves. The authors note that one solution would be for Congress to pass legislation that is more specific, and less open to interpretation, but believe it is difficult for a generalist, divided Congress to do this.
Unaccountable Care: The Dangers of Federal Support for Anticompetitive Behavior in the Healthcare Market (Indiana Health Law Review)
Wesley Moss
The author notes a local correlation between high Accountable Care Organization (ACO) rates and the number of large healthcare practices, with a subsequent decrease in small physician practices. The author believes ACOs can be an effective tool for reducing cost and improving quality, but the ability of ACO members to share information about patients, prices and costs creates a risk of harm to competition. Additionally, ACO mergers remain a problem. The author makes recommendations to retain the positive benefits of ACOs, while limiting the potential harms.
Underregulated Nonprofit Hospitals: Hindering Competition Without Benefitting Communities (Health Affairs)
Evan Hsiang
The IRS gives tax exempt status to nonprofit hospitals, with an expectation that the hospitals provide benefits to the community (including charitable contributions) in exchange. Over half of community hospitals are nonprofits, but the author claims that “a lack of a minimum requirement to demonstrate community benefit has nonprofit hospitals skirting their patient responsibilities while also engaging in acquisition maneuvers to limit competition.” The paper examines if the benefits nonprofit hospitals provide justify the tax breaks they receive. Recommendations include creating clear and specific guidelines for what counts as “community benefit”, requiring a minimum monetary value of charity care, and allowing the FTC to regulate antitrust activities by nonprofit hospitals the same as other hospitals.