Healthcare Competition and Consolidation
The Rise of Health Care Consolidation and What to Do About It (Health Affairs Forefront)
Erin C. Fuse Brown, Yashawini Singh, Christopher M. Whaley, Jared Perkins
As hospital consolidation continues to meteorically rise, an increasing number of government institutions including the Federal Trade Commission, the Department of Justice, and Congress, have diverted move resources towards understanding and responding to the negative impacts of these trends. The drive towards health care consolidation began in the 1990s and has resulted in a highly concentrated hospital market. Increased consolidation has resulted in increased hospital prices, minimal or detrimental improvements in health care quality, and negligible improvements to the patient experience. As this trend continues to intensify with the swelling involvement of insurers and private equity firms, questions arise as to what can be done to mitigate and slow down the progression of consolidation efforts. In this new article, the authors provide an overview of the current healthcare consolidation landscape and discuss a myriad of policy options that could address the threats of consolidation and corporatization. Among their recommendations, they suggest reforming the payment incentives that drive consolidation, strengthening antitrust enforcement, and improving price and ownership transparency over the control and ownership of physician practices. While there is no single solution to solving this issue, a culmination of various strategies could begin to create meaningful impacts.
Cross-Market Hospital Mergers: Assessing Likely Harm and Implications for Government Action (Antitrust Law Journal)
Gregory Vistnes
Cross-market mergers in the healthcare space occur when hospitals engage in mergers despite being located far enough apart that they would be viewed as competing in separate geographic markets. While government antitrust agencies have considered whether these mergers reduce competition, no actions have been taken to challenge them, even though there have been theoretical insinuations that these mergers result in increased prices. Nevertheless, many have begun to call on the government to investigate, block, and/or regulate cross-market hospital mergers. This new article in the Antitrust Law Journal assesses existing evidence on the harms stemming from cross-market mergers and demonstrates that currently there is a lack of empirical evidence supporting the theory of cross-market harm. Given the lack and contradictory nature of existing empirical evidence, this paper suggests that governments should investigate cross-market mergers, but should tread carefully before attempting to regulate or challenge these types of transactions.
Value-Based Payment and Vanishing Small Independent Practices (JAMA)
Hayden Rooke-Ley, Zirui Song, Jane M. Zhu
As the healthcare market evolves, physicians have steadily been moving away from independent practices to employment by hospitals, health systems, and corporations. A variety of reasons such as growing administrative burdens, improved financial incentives, and evolving employment preferences have contributed to these shifts. However, an often-overlooked reason stems from the growing shift away from fee-for-service towards value-based payment models. These shifts place challenging and significant burdens on small independent practices, which in turn presents more opportunities for corporate players to gain ground in their consolidation strategies. To mitigate these evolving effects on the healthcare system, the authors of this paper argue that policymakers should divert their attention towards the growing implications associated with increasing the prevalence of value-based payment models.
Private Equity Acquisitions of Hospices are Increasing; Ownership Remains Opaque (Health Affairs)
Melissa D. Aldridge, Lauren J. Hunt, Zelle Halloran, Krista L. Harrison
Private equity acquisitions within the healthcare space have been steadily increasing. One area where these transactions have been particularly increasing is among hospices. The structure of private equity deals tends to make understanding ownership structures complicated and highly obscure. This new article in Health Affairs attempts to demystify the private equity ownership of hospices by utilizing economic data sets that track mergers and acquisitions related to Medicare data to determine possession. The authors argue that increased transparency around for-profit hospice ownership structures is imperative to ensuring that end-of-life care is held to a high-quality standard.
Pharmaceutical Costs and Competition
State Out-of-Pocket Caps on Insulin Costs: No Significant Increase in Claims or Utilization (Health Affairs)
Kelly E. Anderson, Nathorn Chaiyakunapruk, Eric J. Gutierrez, H. Weston Schmutz, Michael R. Rose, Diana Brixner, R. Brett McQueen
Insulin is used to manage glycemic control in almost all type 1 diabetes patients and approximately 20 to 30 percent of those with type 2 diabetes. However, given the traditionally high costs of insulin, almost one-quarter of patients have reported underutilizing their medication. In an effort to combat the underuse of insulin, more than twenty states implemented price caps on out-of-pocket spending for insulin. This study sought to study whether the price caps resulted changed insulin usage among patients who had type 1 or 2 diabetes. The study assessed a pool of over 33,000 people who used insulin to control their type 1 or type 2 diabetes and commercial insurance coverage. Researchers found that out-of-pocket caps did not significantly increase insulin usage but postulated that patient’s out-of-pocket expenses were likely lower than the cap amounts.
Healthcare System Reform
Ramifications of the Supreme Court’s Latest Term for Health Regulation (JAMA)
Lee A. Fleisher, Anne Joseph O’Connell, Michelle M. Mello
In 2024, the Supreme Court unveiled a landmark decision in the field of administrative law, when it overruled the principle of Chevron deference in Loper Bright Enterprises v. Raimondo. Chevron had previously afforded agency deference in their interpretation of ambiguous agency laws that were brought to court, partially since agencies were the subject-matter experts of the matters they created regulations on. While the end of Chevron deference brings forth many questions about the future and strength of all government agency decisions, this paper specifically assesses how and whether agencies can still create effective and bold health policies. The authors determine that the subsequent judicial changes bring forth critical consequences to the work of health agencies. Furthermore, the future may have more complexities in store for health agencies than initially expected.