When Kamala Harris was California's top prosecutor, she was concerned that mergers between hospitals, doctors' groups and health insurers could stifle competition and result in higher prices for patients. If she wins the presidential election in November, she’s going to have a big selection of options to curb monopolistic behavior across the country.
The Democratic vice chairman could influence the Federal Trade Commission and direct the Departments of Justice and Health and Human Services to prioritize antitrust enforcement and allocate resources accordingly. The Biden administration has already taken an aggressive stance against mergers and acquisitions. In his first yr in office, President Joe Biden issued a supreme command The aim is to tighten antitrust enforcement in quite a few sectors, including healthcare.
Under Biden, the FTC and DOJ fought further mergers than in recent a long time, often involving contracts within the healthcare sector.
“Harris could set the tone and show that she will continue to have this consistent focus on competition and health care pricing,” says Katie Gudiksen, a senior health policy researcher on the University of California College of the Law in San Francisco.
The Harris team didn’t reply to a request for comment.
For a long time, the health care industry has been subject to consolidation despite government efforts to keep up competition. As health systems expand and add hospitals and physician practices to their portfolio, they often gain a big enough share of regional health care resources to have the ability to charge higher prices from insurers. This results in higher premiums and other health care costs for consumers and employers, as quite a few studies show.
Health insurers have also consolidated over the past few a long time, leaving only a handful that control a lot of the markets.
Healthcare analysts say Harris could slow the momentum of consolidation by stopping future mergers that could lead on to higher prices and poorer quality of care. But lots of them agree that the consolidation that has already occurred is an inevitable feature of the U.S. healthcare landscape.
“It’s hard to reconcile the issues,” says Bob Town, an economics professor on the University of Texas.
In the United States, there have been nearly 1,600 hospital mergers from 1998 to 2017 and 428 hospital and health system mergers from 2018 to 2023, in response to a KFF study. The share of community hospitals which might be part of a bigger health system rose from 53 in 2005 to 68 in 2022. And in one other sign of market concentration, well over three-quarters of the nation's doctors were employed by hospitals or corporations in January, in response to a report by Avalere Health.
Although former President Donald Trump was an anti-regulatory candidate, his administration was energetic on antitrust issues – though it allowed one in every of the biggest healthcare mergers in US history, between the pharmacy chain CVS Health and the insurer Aetna. Overall, Trump's Justice Department was more aggressive in mergers than previous republican governments.
Harris served as California's attorney general from 2011 to 2017, driving health care investigations and enforcement actions.
“She has fought back against anti-competitive pricing,” said Rob Bonta, California’s current attorney general, a Democrat.
One of Harris’ most influential decisions was a Investigation 2012 investigated whether the consolidation of hospitals and physician practices gave health systems the facility to charge higher prices. This investigation bore fruit six years later, after Harris' successor, Xavier Becerra, groundbreaking lawsuit against Sutter Health, the enormous hospital operator in Northern California, for anti-competitive behavior. Sutter settled with the state for $575 million.
In 2014, Harris was one in every of the 16 Attorneys General who joined the FTC in a lawsuit to stop a merger between one in every of Idaho's largest hospital chains and its largest physician group. In 2016 Harris has joined the US Department of Justice and 11 other states in a successful lawsuit to dam a proposed $48.3 billion merger between two of the country's largest health insurers, Cigna and Anthem.
Attempts to present the Attorney General the facility to stop or impose conditions on a big selection of health care mergers have been vigorously and successfully opposed. rejected by the California hospital industryMost recently, the hospital industry convinced state lawmakers to exempt for-profit hospitals from upcoming laws This would subject private equity-financed healthcare transactions to review by the Attorney General.
A spokesman for the California Hospital Association declined to comment.
As California's attorney general, Harris' job has been made easier by the state's deep blue political slant. If elected president, she could face a less hospitable political environment, particularly if Republicans control one or each houses of Congress. She could also face opposition from powerful health care lobbyists.
Although it often gets a foul rap, healthcare consolidation does have its benefits. Many doctors select to affix large organizations since it saves them the executive hassle and financial burden of running their very own practice. And integration right into a large healthcare system could be a lifeline for financially struggling hospitals.
Still, a key reason health systems decide to expand through acquisitions is to extend their market potential, keep pace with consolidation amongst insurers, and negotiate higher payments with them. It's an comprehensible response to the financial pressures hospitals are under, says James Robinson, a professor of health economics on the University of California-Berkeley.
Robinson identified that hospitals are required to treat everyone who involves the emergency room, including uninsured people. Many hospitals have large numbers of patients who use Medicaid. the poorly paidAnd in California, they have to meet various regulatory requirements, including earthquake safety and minimum nursing staff requirements, that are costly. “How are they going to pay for that?” Robinson asked.
At the federal level, any effort to curb anticompetitive mergers depends partly on how aggressively the FTC pursues essentially the most serious cases. FTC Chair Lina Khan has made the FTC more proactive on this regard.
Last yr, the FTC and DOJ jointly published latest merger guidelines that suggested the federal government would take a better take a look at deals and take a more comprehensive take a look at which of them violate antitrust laws. In September Lawsuit filed against an anesthesia group and its private equity backer, alleging that they used anti-competitive practices in Texas to drive up prices.
In January, the agency filed a lawsuit to stop a hospital acquisition valued at $320 million in North Carolina.
Still, many deals are usually not dropped at the FTC's attention because their value is below the $119.5 million reporting threshold. And even when it did learn of more deals, “it is very underfunded and has to be very selective about which mergers it challenges,” says Paul Ginsburg, a professor of practical health policy on the University of Southern California's Sol Price School of Public Policy.
Khan's term ends in September 2024. If elected, Harris could seek to reappoint her, but her ability to achieve this could depend upon which party controls the Senate.
Harris could also promote regulations that prevent monopolistic behavior, reminiscent of All-or-nothing contractby which large health systems don’t do business with insurance firms unless the insurance firms conform to include all of their facilities of their networks, whether needed or not. This behavior was one in every of the core allegations within the Sutter case.
It could also lobby the Department of Health and Human Services, which administers the Medicare and Medicaid programs, for pro-competitive measures.
Bonta, California's current attorney general, said there are bad mergers, but there are also good ones. “We approve them all the time,” he said. “And we approve them with conditions that affect cost, access and quality.”
He assumes that Harris will bring similar concerns to the presidency if she wins the election.
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©2024 KFF Health News. Distributed by Tribune Content Agency, LLC.
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