Former DOJ officials warn of ‘big health care’ monopolies

In a recent JAMA opinion piece, Martin Gaynor, PhD, and Jonathan Kanter, JD — both former officials of the U.S. Department of Justice’s Antitrust Division — highlight the emergence of expansive health care conglomerates that mirror the monopolistic tendencies of “Big Tech.”

These entities — the authors cite companies including UnitedHealth Group and CVS Health as examples — have evolved into vertically integrated platforms encompassing insurance, pharmacy benefit management, physician services and data analytics. This “platformization” of health care raises concerns about diminished competition and increased barriers for independent practitioners.

“The largest U.S. health care companies are no longer just health insurers, pharmacy benefit managers, physician practices, home health agencies, hospices, data warehouses, data analytics firms, or hospitals; increasingly, they are all of the above,” explains Gaynor, a professor of economics and public policy at Carnegie Mellon’s Heinz College.

“We are at an inflection point,” Kanter adds. “The trends we see are undermining the ability of health care markets to function adequately, making the U.S. health care system even more expensive, unresponsive, and inaccessible.”

Consolidation’s impact on independent practices

The consolidation trend has significant implications for independent physicians and smaller practices. Studies indicate that mergers and acquisitions in the health sector often lead to higher costs without corresponding improvements in care quality.

For instance, a study published in the Journal of the American College of Surgeons found little evidence that hospital mergers reduce costs or improve care quality.

Further, researchers from Harvard University and the National Bureau of Economic Research revealed that physician services within merged health systems cost between 12% and 26% more than those offered by independent practices.

These dynamics leave independent practitioners at a competitive disadvantage, limiting their ability to negotiate fair reimbursement rates and maintain autonomy in patient care decisions.

Regulatory scrutiny & antitrust actions

In response to growing concerns, federal agencies have intensified antitrust scrutiny in the health care sector. The Department of Justice, Federal Trade Commission and Department of Health and Human Services have launched inquiries into the effects of health care mergers and acquisitions on competition, patient care and costs.

Notably, UnitedHealth Group has faced antitrust investigations related to its acquisition strategies and potential impacts on competition. Similarly, CVS Health’s vertical integration, including its merger with Aetna, has drawn criticism from the American Medical Association for potentially reducing competition and increasing costs.

These regulatory efforts underscore the need for vigilant oversight to ensure that consolidation does not compromise the accessibility, affordability and quality of health care services.

The road ahead

As health care conglomerates continue to expand their reach, experts say the time for passive observation has passed. The consequences of consolidation — rising costs, limited access and reduced autonomy for independent practitioners — are no longer theoretical, according to the authors. For regulators, physicians and policymakers alike, the question now is how to respond.

Gaynor and Kanter argue that current market dynamics risk locking in a future where innovation is stifled, competition is suppressed and a handful of dominant players control nearly every aspect of care delivery.

“The creation of ‘big health care’ platforms risks worsening the already serious problem of monopoly power that plagues health care in the United States,” Gaynor says.

“We foresee a not-so-distant future where a few large integrated health care platforms will have acquired a hold over health care,” Kanter adds.

Traditional structural remedies, including breakups “should be on the table,” they emphasize. Whether policymakers or enforcers are willing to go that far remains to be seen, but the message from two of the nation’s former top antitrust officials is clear: the time for passive observation has passed.