Experts warn that increasing consolidation in healthcare is driving up prices, and that has caught the attention of lawmakers in recent months.
Now a new report suggests the healthcare market has already experienced so much consolidation that policymakers should take steps to ease pricing concerns in the markets that are already concentrated instead of focusing solely on potential future deals.
The Center for American Progress, a left-leaning think tank, dove into trends in provider consolidation and offered several policy goals it says could ease some of the price and access concerns associated with a merger-happy market. Though the industry has yet to lose its appetite for consolidation, many provider markets are already concentrated.
The Commonwealth Fund, for example, estimates that 90% of metropolitan statistical areas are either “highly” or “super” consolidated.
Emily Gee, one of the CAP report’s authors and a health economist at the center, told FierceHealthcare that stakeholders need to be “thinking about how we handle the challenges we already have on hand today.”
“Technically and politically, it’s very hard to break up some of these systems, so the question is: What do you do about it?” Gee said.
To boost competition, the Federal Trade Commission needs greater resources to evaluate potential mergers and step in when there are antitrust concerns, especially for horizontal provider deals that have generally proceeded with limited intervention, according to the report.
In already-consolidated markets, policymakers should investigate price caps or all-payer payment systems, which have been floated in several different forms—from Maryland’s established all-payer model to Medicare buy-ins to a nationalized single-payer system.
“Stopping future consolidation doesn’t change that markets are already highly consolidated,” Gee said. Price capping in some form, she said, is “the one solution that really takes on the problem directly.”
Though policies like these would be a hard sell on the other side of the aisle, the Center for American Progress’s policy suggestions do overlap with some policies touted by the Trump administration. The White House this week issued a report on the state of competition in healthcare, and that includes a policy wish list for Congress and states to consider in the wake of rising consolidation.
The administration suggests site-neutral payments—which were recently finalized in Medicare by the Centers for Medicare & Medicaid Services for hospital-operated ambulatory surgery and outpatient centers—and state-level reassessment of Certificate of Need and clinician licensing laws.
All of these policies are also supported in the CAP report. The group says that CON programs and scope-of-practice requirements are outdated and hinder new market entrants.
The research backing up these regulations is lacking, too, CAP said. The evidence linking CON to improved outcomes is decidedly mixed, for example.
“Many popular policies to promote competition—hospital price transparency and rural telehealth, for example—do not directly address the elephant in the room: market power,” according to the report.