Editor’s Note:  Academicians have theorized that hospital consolidation provides health care providers with “clout” over insurance companies which raises health care prices.  The following front page article from The Washington Post makes clear that it is the insurance companies who have the clout.

From: The Washington Post

Insurers restricting choice of doctors and hospitals to keep costs down

By Sandhya Somashekhar and Ariana Eunjung Cha

As Americans have begun shopping for health plans on the insurance exchanges, they are discovering that insurers are restricting their choice of doctors and hospitals in order to keep costs low, and that many of the plans exclude top-rated hospitals.

Editor’s Note:  The Prepared Statement of FTC Chairwoman Ramirez before the House Judicairy Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law is attached here.  Below is a news article discussing the Chairwoman’s testimony.

From: LifeHealthPro

FTC sees health mergers as threat

By Allison Bell

The head of the Federal Trade Commission (FTC) says the FTC views antitrust review of health care sector mergers and acquisitions as a top priority.

The FTC chairwoman, Edith Ramirez, talked about FTC health care deal antitrust enforcement efforts last week at a House Judiciary Committee antitrust subcommittee hearing.

Editor’s Note:  The authors below suggest that “local governments may want to introduce new policies” in response to hospital consolidation– including policies that would increase healthcare costs for many patients by charging “consumers more for high-priced clinicians and health care centers….”  The article’s policy recommendation faces two key areas of resistance. First, consumers may very well perceive regulations which limit their access to preferred health care providers as being anti-consumer, not pro-consumer. Second, the recomendation would create a policy conflict between local regulators seeking to protect consumers from possible effects from provider consolidation and the federal policy officials promoting such consolidation. Increased local-federal regulatory conflicts would likely lead to increased friction in the healthcare market.

The Lawyer

Plans to merge Royal Bournemouth and Christchurch Hospitals and Poole Hospital Trusts were thwarted by the Competition Commission (CC) last month amid concerns the move would reduce competition and choice for patients, leading to a fall in standards.

This is the first time the CC has intervened in an NHS merger and the decision could have far-reaching implications for any other trusts wishing to merge. In particular, it is clear that foundation trusts will have to put forward a much stronger case to show a merger is in the interest of patients.

For decades there has been a controversy within the regulatory community as to whether “independent” agencies should remain independent. In terms of the economic formulation and evaluation of  regulations independent agencies have frequently been criticized by the Executive Branch, academicians and the courts as not attaining the degree of accuracy in their evaluations as is the case with Executive Branch agencies.

 However there is a middle road as explained by FTC Commissioner Maureen K. Ohlhausen in an article in the Journal of Antitrust Enforcement, (2013), pp. 1–24 namely to adopt the guiding principles in Executive Order 12866 and apply them to FTC proceedings.

Mondaq

Article by Jonathan L. Lewis and Lee H. Simowitz