Healthcare merger mania scrutinized on Capitol Hill as new deal combines main well being methods

Healthcare merger mania scrutinized on Capitol Hill as new deal combines main well being methods

By Eleanor Laise

Lawmakers weigh choices to spice up {industry} competitors and to rein in prices for sufferers

Healthcare-industry consolidation was within the highlight Wednesday, with lawmakers and health-policy specialists analyzing methods to spice up competitors and drive down sufferers’ prices — whilst a significant new health-system mixture was introduced.

Trade mergers are driving up healthcare prices with out offering any clear enhancements within the high quality of care offered, a number of coverage specialists and lawmakers mentioned at a listening to of the Home Power and Commerce Committee’s well being subcommittee that was centered on reining in prices.

The lawmakers are contemplating “insurance policies designed to cut back incentives to consolidate and require suppliers to compete with each other on each worth and high quality,” Rep. Brett Guthrie, a Kentucky Republican who’s the chair of the subcommittee’, mentioned on the listening to. That, he mentioned, contains “proposals that can guarantee sufferers aren’t paying extra for a similar service in a single care setting versus one other.”

Even because the listening to was beneath method, the huge nonprofit well being system Kaiser Permanente introduced plans to accumulate hospital operator Geisinger Well being. Beneath the settlement, which is topic to regulatory overview, Geisinger will develop into a part of a brand new nonprofit group, Risant Well being, which is able to give attention to buying different nonprofit, value-oriented well being methods.

“With this new strategy, we purpose to deal with healthcare affordability and enhance outcomes,” Steve Shivinsky, spokesperson for Kaiser Permanente, advised MarketWatch. Risant goals to reply to present pressures within the {industry}, together with inflation, elevated labor prices, and consolidation, “with a value-based care strategy that improves high quality whereas preserving the give attention to the mission of those community-based hospital methods,” he mentioned.

Lawmakers, in the meantime, referred to as for measures to enhance competitors within the {industry}, together with via higher worth disclosure by hospitals and insurance coverage firms and enforcement of present price-transparency guidelines. Hospitals, for instance, have been required since 2021 to publicly publish their customary expenses and negotiated charges for frequent providers and procedures — however the particulars offered to date have not been all that helpful for worth comparisons, researchers say, partially due to the complexity of the info. Federal regulators are tightening the enforcement course of and shortening deadlines for hospitals which might be in violation of the principles to come back into compliance, Chiquita Brooks-LaSure, administrator of the Facilities for Medicare and Medicaid Providers, advised lawmakers on the listening to Wednesday.

Brooks-LaSure additionally confronted pointed questions from lawmakers on each side of the aisle about Medicare protection of the Biogen (BIIB) and Eisai Alzheimer’s remedy Leqembi, which obtained accelerated approval from the Meals and Drug Administration early this yr. Medicare will cowl the remedy extra broadly if it receives full FDA approval, Brooks-LaSure mentioned.

Almost 4 in 10 Individuals mentioned they or a member of the family had postponed medical remedy in 2022 attributable to price, in accordance with a Gallup ballot performed late final yr. That was the very best degree within the 22 years that Gallup has been monitoring the development. The price considerations aren’t restricted to the uninsured: About one-third of insured adults fear about affording their month-to-month health-insurance premium, in accordance with health-policy nonprofit KFF.

Whole U.S. well being spending hit $4.3 trillion in 2021, in accordance with federal knowledge, with hospital care accounting for almost one-third of the prices.

COVID-19 might have accelerated the development of healthcare-provider focus, Sean Cavanaugh, chief coverage officer at impartial primary-care community Aledade, mentioned in testimony ready for the listening to, as some smaller practices and safety-net hospitals entered the pandemic in weaker monetary positions.

Focus amongst pharmacy-benefit managers, or PBMs, which handle prescription-drug advantages on behalf of insurers, giant employers and different payers, can also be a priority, some lawmakers and coverage specialists mentioned. About 80% of all prescription-drug claims are processed by three firms, the Power and Commerce Committee’s Republican employees mentioned in a memo ready for the listening to, with vertical integration additionally a priority as PBMs purchase pharmacies. The Federal Commerce Fee is analyzing such integration as a part of an inquiry into PBMs launched final yr.

Kristin Bass, chief coverage and exterior affairs officer at PBM commerce group Pharmaceutical Care Administration Affiliation, mentioned in written testimony that PBMs help insurance policies to encourage competitors, including that “drug firms too usually block competitors and are answerable for setting and rising costs.”

A number of lawmakers and coverage specialists on the listening to referred to as for the development of “site-neutral” fee insurance policies — for instance, paying the identical quantity for a service no matter whether or not a affected person is handled at a hospital or a doctor’s workplace. Medicare mustn’t pay extra for a similar actual service when it is delivered in a hospital outpatient division versus one other setting, Loren Adler, affiliate director on the USC-Brookings Schaeffer Initiative for Well being Coverage, advised lawmakers. Legislative proposals to eradicate the fee disparities, he mentioned, may get monetary savings for beneficiaries and taxpayers and encourage competitors.

Ashley Thompson, senior vice chairman on the American Hospital Affiliation, mentioned in written testimony that site-neutral funds may harm the monetary sustainability of hospitals and well being methods as they proceed to navigate the aftermath of the pandemic and workforce shortages.

– Eleanor Laise

This content material was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is printed independently from Dow Jones Newswires and The Wall Avenue Journal.


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04-26-23 1749ET

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