As private equity (PE) investment in healthcare draws scrutiny from advocates and regulators, one lawsuit has been in the spotlight as a potentially important precedent-setter, particularly regarding its corporate practice of medicine (CPOM) claims: American Academy of Emergency Medicine Physician Group (AAEM-PG) v. Envision Healthcare. The Independent Emergency Physicians Consortium called this case a “momentous event” that could signal an inflection point in the increasing corporatization of medicine.[1] However, proceedings have been on pause since May 2023, when the defendant filed for bankruptcy, and it is unclear if and when …

This month’s roundup of studies and reports highlights growing consolidation in health care as well as increasing costs of care. One report predicts higher medical costs in 2024—a trend that continued from the last two years. Another report highlights that policy efforts to reduce facility fees charged by hospitals are a potential avenue for controlling costs. Global capitation, in particular one value-based model utilized in Maryland, may help reduce the cost of specialty care delivery. Meanwhile, trends in the size of physician practices and recent M&A activity are indicators of …

On July 19, the Federal Trade Commission (FTC) and Department of Justice (DOJ) jointly released updated draft guidelines for their antitrust review of mergers and acquisitions. The new proposed guidelines were established following public comments solicited from the past 18 months and aim to better evaluate business and competition in the modern economy and current market realities. The draft guidelines provide 13 principles the agencies will use in determining whether a transaction is anticompetitive and take into consideration increasing concern over new forms of consolidation including vertical mergers, cross-market mergers, …

On June 27, the Federal Trade Commission (FTC), joined by the Department of Justice (DOJ), announced its proposal to amend pre-merger reporting rules that implement the Hart-Scott-Rodino (HSR) Act of 1976. The new rules would require entities seeking to merge to provide more information and details on their transaction. This latest move by the federal antitrust enforcement agencies is consistent with ongoing efforts to promote competition in the U.S. and may act to slow down consolidation trends in the healthcare industry.   What is the Existing Reporting Process The original …

Summer is here, and we hope you can enjoy some vacation time. Whether you’re at work or on the beach, our July roundup brings you the highlights of recent healthcare pricing and competition studies and reports. First, we share several articles that discuss the potential for anticompetitive impacts from consolidation through collaborative agreements and cross-market mergers, two types of lesser-examined transactions that more easily escape regulatory scrutiny. Next, we share an American Hospital Association fact sheet that spotlights insurer policies and acquisitions as under recognized contributors to the changing landscape …

In the past month, newly released publications have chronicled how partnerships, alternative payment models, and insurer market power affect competition and consolidation. Separately, researchers examined Affordable Care Act developments in terms of its impact on coverage and costs of health care. Moreover, as more and more price data are made publicly available, researchers studied how that data is presented, utilized, and what is reveals.   Competition and Consolidation Since 2005, over 190 rural hospitals have closed across the US, and today, 600 more (the nearly one third that remain) are …

The healthcare market is seeing intense antitrust scrutiny in recent years at both the federal and state level. As the Federal Trade Commission (FTC) and Department of Justice (DOJ) step up their enforcement efforts, some states are exploring avenues to allow healthcare entities to pursue consolidating transactions the state deems beneficial and avoid antitrust challenge. One of them is the use of certificate of public advantages (COPA). A recent slew of antitrust immunity disputes coming out of a healthcare merger in Louisiana brought the use of COPA and state action …

In the 2023-2024 legislative term, the California legislature has introduced a multitude of legislation targeting consolidation and competition in health care, system reform and price and quality transparency. In a two-part series, we highlight some of the noteworthy legislation proposed this session. Part 1 focuses specifically on the State’s efforts to promote a more competitive healthcare market by targeting restraints of trade and consolidation. In Part 2, the focus will shift to proposed bills targeting system reform, price and quality transparency, and prescription drug prices.   Health Care Consolidation California …

As we prepare to transition to the summer, this month is an opportune time to examine the impacts of potentially a new season in the health care market. Researchers noted that not only is there a rise of geographically distant mergers even as rural hospitals struggle to maintain profitability, but also that private equity is a new major financier of the health care market. On the other hand, California hopes to increase competition with Golden Choice, a state-run public option. Federally, price transparency efforts could be a step towards creating …

The federal agencies have been flexing their muscles in antitrust enforcement in recent years to reinvigorate competition. This month, the Federal Trade Commission (FTC) ordered the unwinding of a completed merger that combined gene sequencing company Illumina and cancer test developer Grail. This move is highly unusual not only because of the vertical nature of the consolidation, which typically receives less antitrust scrutiny, but also how the Commission unanimously voted to undo a consummated merger while overturning an administrative court ruling in the process. For these reasons, this latest development …