When Kamala Harris was the chief prosecutor of California, she was worried that the merger of hospitals, groups of doctors and health insurers could hinder competition and lead to higher prices for patients. If he wins the presidency in November, he will have a variety of options to undermine private behavior across the country.
A Democratic vice president can influence the Federal Trade Commission and direct the departments of Justice and Health and Human Services to prioritize enforcement of antitrust laws and channel resources more effectively. Currently, the Biden administration has taken an aggressive stance against mergers and acquisitions. In his first year in office, President Joe Biden issued an executive order aimed at strengthening antitrust enforcement in many industries, including health care.
Under Biden, the FTC and DOJ have fought more mergers than they have in decades, often targeting health care deals.
“What Harris can do is set the tone that he’s going to continue this laser focus on competition and health care prices,” said Katie Gudiksen, a senior health policy researcher. University of California College of the Law, San Francisco.
The Harris campaign did not respond to a request for comment.
For decades, the health industry has remained strong despite government efforts to maintain competition. As health systems expand, adding hospitals and physician practices to their portfolios, they often find a fair share of health care resources instead of commanding higher prices from insurers. . That results in higher premiums and other health care costs for consumers and employers, according to multiple studies.
Health insurers have also consolidated in recent decades, leaving only a few to dominate many markets.
Health care analysts say it is possible for Harris to slow the pace of consolidation by preventing future mergers that could lead to higher costs and lower quality care. But most of them agree that consolidation is an inevitable feature of the US health care landscape.
“It’s hard to crack eggs,” said Bob Town, an economics professor at the University of Texas.
There were about 1,600 hospital mergers in the United States from 1998 to 2017 and 428 hospital and health system mergers from 2018 to 2023, according to the KFF study. The percentage of public hospitals that belong to larger health systems has risen from 53 in 2005 to 68 in 2022. And in another sign of market pressure, as of January, more than a quarter of the country’s doctors were employed by hospitals or organizations, according to a report produced by Avalere Health.
Despite former President Donald Trump’s aversion to regulation as a candidate, his administration was active in antitrust efforts — even as it allowed one of the largest health care mergers in US history, between drug chain CVS Health and insurer Aetna. In general, Trump’s Justice Department has been more aggressive about mergers than previous Republican administrations.
Harris, as California attorney general from 2011 to 2017, initiated health research and enforcement.
“He pushed back against anti-competitive pricing,” said Rob Bonta, California’s current attorney general, a Democrat.
One of Harris’ most powerful conclusions was a 2012 investigation into how mergers between hospitals and physician practices gave health systems the power to demand higher prices. That investigation bore fruit six years later after Harris’ successor, Xavier Becerra, filed a landmark lawsuit against Sutter Health, the operator of the Northern California hospital giant, for anticompetitive behavior. Sutter settled with the government for $575 million.
In 2014, Harris was one of 16 state attorneys general who joined the FTC in a lawsuit to end a merger between one of Idaho’s largest hospital chains and its largest physician group. . In 2016, Harris joined the United States Department of Justice and 11 other states in a successful lawsuit to block a proposed $48.3 billion merger between the nation’s two largest insurers, Cigna and Anthem.
Efforts to give the state attorney general the power to ban or regulate multiple health care providers have been strongly, and effectively, opposed by California’s hospital industry. Recently, the hospital industry lobbied state lawmakers to exempt for-profit hospitals from pending legislation that would have put government-sponsored health care partnerships under scrutiny by the attorney general. .
A spokesman for the California Hospital Association declined to comment.
As California’s attorney general, Harris’ job was made easier by the state’s deep political climate. If he were to be elected president, he could face an inhospitable political environment, especially if Republicans control one or both houses of Congress. In addition, he could face opposition from powerful health care advocates.
Although it often gets a bad rap, health care integration also offers benefits. Many doctors choose to join larger organizations because it relieves them of the administrative and financial burden of running their practices. And getting involved in a large health system can be a way of life for financially strapped hospitals.
However, the main reason life systems choose to grow through acquisitions is to gather market power so that they can coordinate among insurers and negotiate with them for payments. higher ones. It’s an understandable response to financial pressure on hospitals, said James Robinson, a professor of health economics at the University of California-Berkeley.
Robinson noted that hospitals must treat anyone who shows up in the emergency room, including the uninsured. Many hospitals have a large number of Medicaid patients, which pay well. And in California, they face a series of regulatory requirements, including seismic retrofitting and minimum nursing staff, which are expensive. “How are they going to pay for that?” Robinson said.
At the federal level, any attempt to crack down on anticompetitive practices will depend on how aggressive the FTC is in pursuing the worst cases. FTC Chairwoman Lina Khan has made the FTC more active in this regard.
Last year, the FTC and DOJ issued new merger guidelines, which encouraged the federal government to scrutinize deals and take a broader view of which ones violate antitrust laws. In September, the FTC filed a lawsuit against a group of anesthesiologists and its private equity sponsor, alleging that they engaged in anticompetitive practices in Texas to raise prices.
In January, the agency sued to stop the purchase of a $320 million hospital in North Carolina.
However, many transactions are not monitored by the FTC because their value is below its reporting threshold of $119.5 million. And while it may hear about other deals, “it doesn’t have a lot of resources and needs to be very selective about where they’re put together,” said Paul Ginsburg, a health policy professor at the University of Southern California’s Sol Price. School of Public. Policy.
Khan’s term expires in September 2024, and Harris, if elected, could seek re-election, though his ability to do so would depend on which party controls the Senate.
Harris could also recommend policies that discourage monopolies such as all-or-nothing contracting, where large health systems refuse to do business with insurance companies unless they agree to include all of their services in their network, regardless of whether or not they are required. That behavior was one of the main charges in Sutter’s lawsuit.
He could also seek policies from the Department of Health and Human Services, which administers Medicare and Medicaid, that promote competition.
Bonta, the current California attorney general, said that while there are bad connections, there are also good ones. He said: “We allow them all the time. And we allow them with conditions that deal with cost and access to the address and quality of the address.
He expects Harris to bring similar concerns to the president if he wins.
This story was reprinted from KFF Health News, a national newsroom that produces in-depth journalism on health issues and is one of the main programs operating in KFF – an independent source of health policy research, polls, and journalism.
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