Post-ACA merger-mania continues as officials increase scrutiny

The wave of major healthcare provider and payer mergers prompted by the Affordable Care Act is coming under increased scrutiny from regulators, but healthcare leaders argue the trend's negative effect on consumers and competition is overstated, according to the Wall Street Journal.

Earlier this month, the House Judiciary Committee held a contentious hearing on the trend's potential anticompetitive effects, FierceHealthPayer previously reported, and a Senate subcommittee will also hear testimony on the issue today.

Meanwhile, Denver-based DaVita HealthCare Partners Inc. is set to acquire the medical group, the Everett Clinic, which encompasses about 360 Washington state-based physicians, according to the article. Everett CEO Rick Cooper told the WSJ the group has been seeking to partner with a bigger player to provide the capital to expand its geographical range.

"Everybody is getting larger," said Michael J. Dowling, chief executive of New York's North Shore-LIJ Health System, which is changing its name to Northwell Health as part of a plan to merge the 21-hospital system with Maimonides Medical Center and expand into Brooklyn. "The big payers are going to be doing deals with big providers. The big providers are going to compete on quality and service and price. You have to be large enough to be able to compete in that world."

Meanwhile, smaller providers, such as Harvey, Illinois' Ingalls Health System, are increasingly seeking partners to head off financial woes.

As consolidation increases, federal authorities from the Justice Department to the Federal Trade Commission are looking at the deals to determine their effect on consumers and competition, such as the recent ruling against a deal between Saltzer Medical Group and St. Luke's Health System in Idaho.

But healthcare leaders argue provider consolidation benefits consumers, and that rather than hiking prices for services, they seek to reduce costs as the organizations grow by eliminating waste and redundant services. Moreover, a larger system is better positioned to coordinate all aspects of patient care and make operations more efficient, Robert J. Henkel, CEO of Ascension Health's healthcare operations arm, told the WSJ.

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