Consolidation trend requires new approaches to preserving competition

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Much of the September issue of Health Affairs deals with the increasing consolidation of healthcare organizations. To maintain competition, regulators need to do more than rely on antitrust enforcement, according to Sherry Glied, PhD, dean of New York University’s Robert F. Wagner Graduate School of Public Service and Stuart Altman, PhD, professor of national health policy at Brandeis University.

With providers and insurers concentrating their market power, Glied and Altman argue even an aggressive antitrust policy is “unlikely to be sufficient to address those long-term systemic changes to the health care system” brought by both vertical and horizontal integration. For example, the only alternative for some midsize hospitals seeking to merge may be to close, which would also reduce competition. Larger systems blocked from quickly vertically integrating may instead build those additional facilities and services themselves.

To protect consumers from these anticompetitive forces, Glied and Altman discuss two different directions for new kinds of regulatory interventions: limiting the bargaining power of “must-have” hospitals that dominate their region and allowing insurers to compete for a single contract in regions where competing mid-size hospitals aren’t feasible.

Read more of their commentary at the link below