Hospital mergers and acquisitions are a bad deal for patients. Why aren’t they being stopped?

Contrary to what health care executives advertise, hospital mergers and acquisitions aren’t good for patients. They rarely improve access to health care or its quality, and they don’t reduce prices. But the system in place to stop them is often more bark than bite.

During 2019 and 2020, hospitals acquired an additional 3,200 medical practices and 18,600 physicians. By January 2021, almost half of all U.S. physicians were employed by a hospital or health system.

In 2018, the last year for which complete data are available, 72% of hospitals and more than 90% of hospital beds were affiliated with a health care system. Mergers and acquisitions are increasing the number of health care systems while decreasing the number of independently operated hospitals.

When hospitals buy provider practices, it leads to more unnecessary care and more expensive care, which increases overall spending. The same thing happens when hospitals merge or acquire other hospitals. These deals often increase prices and they don’t improve care quality; patients simply pay more for the same or worse care.

Mergers and acquisitions can negatively affect clinician morale as well. Some argue they lead to providers’ loss of autonomy and increase the emphasis on financial targets rather than patient care. They can also contribute to burnout and feeling unsupported.

Considerable machinery is in place at both the federal and state levels to stop “anticompetitive” mergers before they happen. But that machinery is limited by a lack of follow through.

The Federal Trade Commission (FTC) and the U.S. Department of Justice have always had broad authority over mergers. By law, one or both of these entities must review for any antitrust concerns proposed deals of a certain size before the deals are finalized. After a preliminary review, if no competition issues are identified, the merger or acquisition is allowed to proceed. This is what happens in most cases. If concerns are raised, however, the involved parties must submit additional information and undergo a second evaluation.

Some health care organizations seem willing to challenge this process. Leaders involved in a pending merger between Lifespan and Care New England in Rhode Island — which would leave 80% of the state’s inpatient market under one company’s umbrella — are preparing to move forward even if the FTC deems the deal anticompetitive. The companies will simply ask the state to approve the merger despite the FTC’s concerns.

The reality is that the FTC’s reach is limited when it comes to nonprofits, which most hospitals are. While the FTC can oppose anticompetitive mergers involving nonprofits, it cannot enforce action against them for anticompetitive behavior. So if a merger goes through, the FTC has limited authority to ensure the new entity plays fairly.

What’s more, the FTC has acknowledged it can’t keep up with its workload this year. It modified its antitrust review process to accommodate an increasing number of requests and its stagnant capacity. In July, the Biden administration issued an executive order about economic competition that explicitly acknowledges the negative impact of health care consolidation on U.S. communities. This is encouraging, signaling that the government is taking mergers seriously. Yet it’s unclear if the executive order will give the FTC more capacity, which is essential if it is to actually enforce antitrust laws.

At the state level, most of the antitrust power lies with the attorney general, who ultimately approves or challenges all mergers. Despite this authority, questionable mergers still go through.

In 2018, for example, two competing hospital systems in rural Tennessee merged to become Ballad Health and the only source of care for about 1.2 million residents. The deal was opposed by the FTC, which deemed it to be a monopoly. Despite the concerns, the state attorney general and Department of Health overrode the FTC’s ruling and approved the merger. (This is the same mechanism the Rhode Island hospitals hope to employ should the FTC oppose their merger.) As expected, Ballad Health then consolidated the services offered at its facilities and increased the fees on patient bills.

It’s clear that mechanisms exist to curb potentially harmful mergers and promote industry competition. It’s also clear they aren’t being used to the fullest extent. Unless these checks and balances lead to mergers being denied, their power over the market is limited.

Experts have been raising the alarm on health care consolidation for years. Mergers rarely lead to better care quality, access, or prices. Proposed mergers must be assessed and approved based on evidence, not industry pressure. If nothing changes, the consequences will be felt for years to come.

America’s major medical debt problem

https://mailchi.mp/d953ea288786/newsletter031821-4639518?e=ad91541e82

Concerns Mount Over Looming Surge in Bankruptcy as COVID Medical Debt Soars

Medical debt can be a crushing burden for families, and it is a major problem in the United States. The nonprofit RIP Medical Debt says it’s wiped out debt for 2.7 million patients since 2014, totalling more than $4.5 billion. One of the most famous health policy studies ever conducted — the Oregon Health Insurance Experiment — found that having Medicaid coverage reduced a person’s likelihood of having an unpaid medical bill sent to collection by 25%. Now a study published last month in JAMA offers new evidence on the relationship between Medicaid and medical debt, and the scale of the country’s medical debt problem.

Using a subset of credit reports from one major U.S. credit agency for every year between 2009 and 2020, researchers Raymond Kluender, Neale Mahoney, Francis Wong and Wesley Yin looked at the total amount of medical debt and new medical debt each year. They found that while both measures of medical debt have decreased almost every year since 2014, nearly 1 in 5 Americans were under collections for medical debt as of early 2020. They also found that since 2014, medical debt has been the largest source of debt for Americans, surpassing all other types of debt — credit cards, personal loans, utilities and phone bills — combined. And the medical debt was not evenly distributed around the country. Approximately, 1 in 4 individuals in the South were under collection for medical debt in 2020, but only 1 in 10 in the Northeast.

To assess the impact of Medicaid coverage on medical debt, Kluender and colleagues compared the total amount of new debt accrued by people living in states that expanded Medicaid and those that have not between 2009 and 2020, allowing them to confirm that any trends they identified didn’t pre-date Medicaid expansion in 2014. They found that between 2013 and 2020 the average amount of new medical debt decreased 34 percentage points more in states that expanded in 2014 compared to non-expansion states, and the drops were most prominent in the lowest income zip codes. The analysis can’t prove a causal relationship between medical debt and Medicaid expansion, but interestingly, the authors found no statistically significant difference in nonmedical debt between expansion and non-expansion states. This lack of an effect on nonmedical debt supports the association between Medicaid and reductions in medical debt.

The article does have limitations: It doesn’t include debts paid on a credit card or through payment plans; it doesn’t reflect the impact of COVID-19; and it can’t account for unobservable changes in policy or circumstance that might have coincided with Medicaid expansion and impacted medical debt. But it does add evidence to support the value of Medicaid coverage — a particularly timely finding, with more than 11 million people joining Medicaid since the start of the pandemic and Democrats in Congress looking to cover the more than 2 million people in the so-called coverage gap in the 12 non-expansion states.

New Jersey school board sues Horizon, says insurer threatened to stop paying claims for 14,000 workers

Jersey City BOE sues Horizon over alleged 'threat' to stop paying claims  for 14,000 employees | mainlynews.gr

Horizon Blue Cross Blue Shield of New Jersey threatened to stop paying medical claims for about 14,000 employees of the Jersey City Board of Education, a lawsuit filed by the board alleges, according to NJ.com.

Horizon Healthcare Services, the district’s medical claim manager, planned to stop processing insurance claims Nov. 25 amid an ongoing dispute over payment, the lawsuit alleges. On Nov. 24, a judge granted a temporary restraint aimed at protecting the insured until Dec. 17. 

The school board accused Horizon of not complying with lowering out-of-network rates and charging hidden fees, among other allegations, according to the lawsuit. 

Horizon denied the allegations. In a statement to NJ.com, Thomas Vincz, public relations manager for Horizon Blue Cross Blue Shield of New Jersey, said: “At no time did Horizon ever threaten to terminate the [Board of Education]’s coverage and Jersey City Board of Education employees should know that their coverage has remained in place, uninterrupted, while we continue to work with Board staff to resolve the issues preventing them from paying the charges owed under their existing contract.”

The lawsuit was filed in the Hudson County Superior Court. Horizon has until Dec. 9 to respond to the lawsuit, according to NJ.com.