Healthcare Consolidation
Partnerships Between Pharmaceutical and Telehealth Companies – Increasing Access or Driving Inappropriate Prescribing? (The New England Journal of Medicine)
Erin C. Fuse Brown, Oliver J. Wouters, Attev Mehrotra
As technology has progressed, so too have health care delivery mechanisms for Americans. However, an emerging collaboration between pharmaceutical companies, like Pfizer and Eli Lilly, and telehealth companies is leaving many divided. Pharmaceutical companies have evolved their marketing and disbursement practices by increasingly using social media marketing to now directly link to telehealth providers who connect healthcare consumers with a clinician who can prescribe the advertised medications after a quick virtual appointment. These tactics are further sweetened with copayment coupons and home delivery options. While proponents believe this new methodology could vastly improve access to care, particularly for those in less-resourced settings, critics are concerned that these partnerships will lead to inappropriate prescribing practices, violations of the Anti-Kickback Statute (AKS), and insufficient regulation. Authors of a new article discuss the plethora of concerns with this new marketing and sales strategy and advocate for stronger oversight and enforcement practices over these relationships. Specifically, the authors recommend increasing data collection, improving transparency over the financial relationships between involved entities, strengthening marketing regulations, and improving implementation of the AKS to maintain and ensure patient safety as we move forward.
The Rise of Health Care Platforms (JAMA)
Jonathan Kanter, Martin Gaynor
While antitrust enforcement and policy in the United States has heavily focused on the big tech platforms over the past decade, the authors of a new Viewpoint article in JAMA argue that policymakers and stakeholders should direct some of their scrutiny towards the healthcare system. As a smaller number of large healthcare conglomerate platforms increasing exhibit similar characteristics to big tech, it may be time to focus more attention on antitrust actions to curb such behaviors in an attempt to protect healthcare consumers. Specifically, the authors of this article argue that the conglomeration of health services and the formation of multisided platforms that function as essential health care intermediaries run the risk of garnering expansive reach and influence while growing in an anticompetitive manner that negates the abilities and attempts of smaller rivals. For this reason, increased attention from policymakers and stakeholders may be the only way to move forward effectively.
Defending Healthcare Vertical Merger Challenges After the Release of 2023 Antitrust Merger Guidelines (Houston Journal of Health Law and Policy)
Abel Chacko
Antitrust laws protect consumers by regulating competition in an industry through the prevention of anticompetitive mergers and business practices. These laws have grown and evolved over time under joint efforts by the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ). While the biggest problem in most industries stems from horizontal consolidation (i.e., mergers between direct competitors), the healthcare industry has experienced a proliferation in vertical mergers (i.e., mergers between companies along a supply chain for a common good or service). Citing fears of increasingly anticompetitive behaviors in healthcare, the Biden administration cracked down on these issues by releasing the FTC and DOJ’S New Merger Guidelines in December 2023 – a set of guidelines which have been reaffirmed by the current Trump administration. These new guidelines crack down on existing defenses to perceived anticompetitive behaviors, including the types of efficiency defenses, the DOJ and FTC will now consider when evaluating challenged mergers. In this new article in the Houston Journal of Health Law and Policy, the author ponders what remains a sufficient defense to antitrust challenges under the FTC and DOJ’s changing merger guidelines – particularly as it relates to efficiencies for vertical merger challenges in healthcare. The author takes steps to consider plausible answers to this question by first providing an overview of modern antitrust law and changing guidelines for enforcement before describing the existing antitrust law landscape in healthcare and healthcare-specific factors for considering vertical merger challenges. The article concludes with suggestions on how to defend against vertical merger challenges in healthcare under the New Merger Guidelines.
Price Transparency
State Healthcare Regulations and Political Affiliation Associated with Total Hip Arthroplasty Prices Across the United States (The Journal of Arthroplasty)
Katherine M. Kutzer, Kevin A. Wu, Devika Shenoy, Aaron Therien, Sharreiff N. Shah, Sean Ryan, Christian Pean, Thorsten M. Seyler
Total hip arthroplasty (THA), otherwise known as total hip replacement, is a surgical procedure where damaged portions of a hip joint are replaced with artificial components. The surgery is an elective procedure which has rapidly increased in volume while maintaining relatively predictable costs. Researchers used this procedure as a proxy to assess the price transparency of hospital services by studying the association between THA pricing and state characteristics including political affiliation, Medicaid expansion status, certificate of need (CON) statutes, and gross domestic product per capita among 2,226 hospitals nationwide. While the median price of THA was found to be $12,465.46 among hospitals nationwide, prices for the procedure were found to be lower in states with Democratic leadership, Medicaid expansion, and CON laws. While these findings assess only one type of procedure, they could underscore the complexity and lack of consistency around healthcare prices across the country while showing the potential impact of state policies and socioeconomic factors on price determination for other health procedures.
Private Equity and Corporate Ownership
What Are the Policy Options for Regulating Private Equity Involvement in Health Care? A Review of Policies Implemented or Considered in Seven High-Income Countries (Health Policy)
Matthew Tracey, Katharine Schulmann, Florian Tille, Thomas Rice, Julien Mercille, Rob Timans, Sara Allin, Alexis Dottin, Sanna Syrjälä, Tiia Sotamaa, Ilmo Keskimäki, Bernd Rechel
Over the past twenty years, private equity groups have increasingly targeted their investments towards global health care systems. While private equity investments can optimize health services, they have often been criticized for lacking synergy with the social values of health care delivery systems both domestically and abroad. In this new Health Policy study, researchers identified proposed and implemented policies targeting private equity involvement in health care across seven high-income countries (namely, Canada, Germany, Finland, France, Ireland, The Netherlands, and the United States). Policies were categorized using a novel conceptual framework which separated the regulations on the basis of their purpose. Overall researchers found that while many countries have attempted to regulate private equity involvement in healthcare, a large amount of these policies focused on disclosure over regulation, and several had yet to be evaluated for efficacy. As the situation continues to evolve, researchers recommend that future studies assess the effectiveness of implemented policies that target private equity investments in health care.
Common Institutional Ownership and the Erosion of Competition in the American Health Insurance Market: A Quantitative Analysis (Health Policy)
Kevin Smith
Across industries, when large institutional investors and private equity funds repeatedly own significant stakes in overlapping publicly traded firms, the common ownership starts to create monopolies and inevitably leads to anticompetitive behavior. In the United States, common corporate ownership has been growing among health insurers and has been suspected of influencing the level of competition in this market. This new paper in Health Policy assesses the causal impact of common ownership on competition in the healthcare market, particularly as it relates to health insurance. In all, the author found that common ownership leads to about a 7.7% increase in monthly premiums charged for some health insurance plans, thereby potentially reducing competition on health insurance exchanges (such as those created by the 2010 Affordable Care Act). These findings indicate support for policies that seek to regulate institutional and private equity investment in the American health insurance industry, while corroborating those decisions with assessments of robust data sets regarding health insurance ownership and quality issues.