Antitrust chief details issues of concern for government regulators.
Deputy Assistant Attorney General Andrew J. Forman, leader of DOJ’s Antitrust Division, spoke this week as part of the Health Care Competition Conference of The Capitol Forum, an investigative news organization that focuses on merger control, corporate investigations and energy.
Health care is personal and many people, including government lawyers and regulators, have personal examples about medical workers and resources helping them or their loved ones, Forman said.
“On the other hand, there is little doubt that key aspects of competition in the healthcare industry are broken,” Forman said in the speech published by DOJ. “The system has real competitive problems, and these problems impact real people in real ways.”
As evidence, Forman cited national economic data, blame-gaming among health care providers, insurers and drug makers, and economic analysts. And it comes from everyday Americans, including those who submitted personal concerns in the 3,000 comments to DOJ’s draft merger guidelines.
“So, the fact that competition in the U.S. health care industry is not healthy is largely undisputed and not very controversial,” Forman said. “Rather, the dispute is more about the root causes of the competition problems and how best to try to fix them.”
Antitrust enforcement is not “a magic potion to cure all the competitive ills of the health care industry,” he said. But it is part of the federal government’s toolkit to address those problems.
Forman outline key areas of concern for the government regulators.
Nonmerger, conduct-related matters.
“We will not hesitate to investigate and, as appropriate, bring enforcement actions involving big issues that can have big impacts,” Forman said. “But we also need to let individuals, companies and those who report concerns know that the “cops are on the beat” for more narrow, discrete competition problems as well.”
Health care transactions.
Forman cited the complexity of relationships and money in the business of health care. Companies making deals can “expect close scrutiny and, when the facts and law warrant, we will not hesitate to act,” he said.
The government must set a high bar because if anticompetitive remedies fail, the American people pay and the problem remains, Forman said.
Provider and payer consolidation.
Everyone agrees with the concept of value-based care – lowering costs while improving patient outcomes. “But there are real questions whether provider/payer consolidation has delivered on this conceptual goal, as well as related questions whether the compelling label actually may be masking increased power and conduct that increases barriers and otherwise harms competition,” Forman said.
Roll-ups and transparency in ownership of health care.
Forman praised the U.S. Federal Trade Commission’s (FTC) lawsuit against U.S. Anesthesia Partners Inc. of Texas and a private equity partner. The FTC claims the two had a multiyear anticompetitive scheme to consolidate anesthesiology and drive up prices for their own benefit.
Concentrated market structures.
Health care giants are amassing insurance companies, physicians and other providers, pharmacy benefit managers, pharmacies, and other services under the same roof, Forman said. Done properly, that might spark competition and increase coordination for patients.
“Or has the consolidation led to more power, increased entry barriers by requiring multi-level entry or otherwise, higher prices, less innovation and deeper moats defending sources of power?” he said.
Health care companies assemble “massive data reservoirs” that could allow them to game the system and gain unfair advantages, Forman said.
Those include wages, noncompete and no-poach agreements, and forcing physicians to see more patients over less time. These issues are especially important in rural communities where health care systems are the largest employers, Forman said.
Government regulators can do more with third-party assistance in investigations and court actions, Forman said, so anyone with concerns about unfair competition should reach out to the DOJ, FTC, and other regulatory entities. He noted that takes time and resources, but increases the chances of making a difference and maintaining a fair market.
“Health care competition is too important to sit on the sidelines,” Forman said.