AHA, HSC send Congress mixed message on healthcare consolidation
The U.S. House Ways and Means Health Subcommittee has received statements on the consolidation of the healthcare industry and the effects of accountable care organizations (ACOs), including comments from the American Hospital Association (AHA) and the Center for Studying Health System Change (HSC).
On top of the earlier reported response from the American Medical Association, which set consolidation in the virtual crosshairs, HSC and AHA offered a mixed bag of sentiments.
“The need for greater collaboration among healthcare providers has never been more compelling,” the AHA’s statement read. “Persistent fragmentation contributes to gaps in quality and efficiency that adversely impact providers and their patients." However, according to AHA, a lack of timely user-friendly guidance from the federal antitrust agencies on how antitrust laws and policies will be applied to such clinical integration arrangements among hospitals and other caregivers is impeding progress.
The organization urged the Department of Justice's Antitrust Division to be steadfast about anticompetitive conduct on the part of health insurers. "We disagree with those who contend that hospitals – the object of so much antitrust scrutiny – have somehow acquired the power to dictate terms to health plans," the association said, noting that mergers and market power of insurers have received comparatively little scrutiny.
From HSC’s perspective, federalism might be the harbinger of solutions in terms of consolidation matters. Paul Ginsburg, president of the HSC and research director of National Institute for Health Care Reform, stated, “Antitrust policy will be an important area where regulation can enhance market forces. In addition to standard reviews of mergers and acquisitions, the Department of Justice and Federal Trade Commission are involved in guiding rules for Medicare ACOs to safeguard against increased provider leverage resulting from greater integration.”
He added that reduced tax subsidies for high-cost health benefits likely will increase the acceptance of insurance products by employers and employees. These products could provide incentives to enrollees to favor lower cost providers. “The alternative to market forces is rate review or rate setting by a public entity,” Ginsburg concluded. “This is much more likely to develop at the state level rather than the federal level. … If there is to be a market solution to this problem, it will have to address both the issue of consolidation and engage consumers in ways that they have resisted before.”
On top of the earlier reported response from the American Medical Association, which set consolidation in the virtual crosshairs, HSC and AHA offered a mixed bag of sentiments.
“The need for greater collaboration among healthcare providers has never been more compelling,” the AHA’s statement read. “Persistent fragmentation contributes to gaps in quality and efficiency that adversely impact providers and their patients." However, according to AHA, a lack of timely user-friendly guidance from the federal antitrust agencies on how antitrust laws and policies will be applied to such clinical integration arrangements among hospitals and other caregivers is impeding progress.
The organization urged the Department of Justice's Antitrust Division to be steadfast about anticompetitive conduct on the part of health insurers. "We disagree with those who contend that hospitals – the object of so much antitrust scrutiny – have somehow acquired the power to dictate terms to health plans," the association said, noting that mergers and market power of insurers have received comparatively little scrutiny.
From HSC’s perspective, federalism might be the harbinger of solutions in terms of consolidation matters. Paul Ginsburg, president of the HSC and research director of National Institute for Health Care Reform, stated, “Antitrust policy will be an important area where regulation can enhance market forces. In addition to standard reviews of mergers and acquisitions, the Department of Justice and Federal Trade Commission are involved in guiding rules for Medicare ACOs to safeguard against increased provider leverage resulting from greater integration.”
He added that reduced tax subsidies for high-cost health benefits likely will increase the acceptance of insurance products by employers and employees. These products could provide incentives to enrollees to favor lower cost providers. “The alternative to market forces is rate review or rate setting by a public entity,” Ginsburg concluded. “This is much more likely to develop at the state level rather than the federal level. … If there is to be a market solution to this problem, it will have to address both the issue of consolidation and engage consumers in ways that they have resisted before.”