The Biden Administration Must Increase Health Care Market Competition by Addressing the Challenges in its Consolidation Trends
By: Pratik Thakur
Date Published: October 14th, 2021
There has been a growing trend of consolidations among health systems which impacts competition and quality of services. Specifically, Optum’s acquisition of three other groups: Davita, Catholic, and Dignity, in 2019 made them the largest physician employer in the country. Therefore, the article emphasizes that the Biden administration should look into consolidation and enforce policies that maintain competition.
The two main challenges that the Biden administration will face include allowing mergers and acquisitions, which can increase competition in consolidated markets, but still mitigating and prohibiting any consolidation that negatively impacts competition. The article offers three steps that can be taken to help resolve the aforementioned hurdles which include increasing federal antitrust enforcement agencies’ funding, appointing heads that will expand their respective antitrust enforcement agency, and forming an interagency task force committed to enhancing competition which can include entities like the Food and Drug Administration (FDA), Federal Trade Commission (FTC), Department of Justice (DOJ), etc.
It would be unlikely that health care businesses will benefit the public with their transactions, as they would rather prioritize gaining profits in for-profit organizations and keeping jobs/facilities in non-for-profit systems. Consequently, the government would be responsible for handling these consolidation issues. However, these antitrust agencies have seen a decline in their appropriations in the last decade, and employment has also decreased 25% at the same time at the DOJ while stagnating at the FTC. As reported mergers increased by approximately 80% from 2010 to 2019, there must be further financial support to these agencies.
Even though there have been efforts to prohibit anti-competitive actions in the health care market like the State of California’s lawsuit against Sutter Health for their “all-or-not contracting” policies, resulting in a $575 million payout from Sutter, these practices are still occurring all over the nation still, so it is imperative that the federal government take steps to improve competition. Any reforms from Congress’ end are unlikely to happen because of the current political divide, making it so that it is up to the executive branch to develop these previously mentioned solutions for the time being.
The article does acknowledge that objections from industry interest groups will exist from hospital and vaccine developers in response to the proposed actions. These critics’ messages could influence the sentiments of the public and elected officials which can make it more difficult for the Biden administration to go through with such actions. However, ensuring that the competitive nature of the health care markets stays intact is crucial for the nation’s well-being in terms of both population and economic health.
Citation: Dafny, Leemore. “Addressing consolidation in health care markets.” JAMA 325.10 (2021): 927-928.