PEPC Submits Statement for the Record for the Senate Judiciary Committee Hearing on “Antitrust Applied: Hospital Consolidation Concerns and Solutions”

On May 19, the U.S. Senate Committee on the Judiciary, Subcommittee on Competition Policy, Antitrust, and Consumer Rights, will hold a hearing entitled “Antitrust Applied: Hospital Consolidation Concerns and Solutions.”

PEPC submitted a statement for the record for the hearing, highlighting concerns around increasing consolidation in the health care market and the urgency it creates to ensure that value-based care is a path to sustainability for practices and physicians who are independent and wish to remain so.

PEPC highlighted evidence of the detrimental impact of hospital consolidation in the following areas:

  • Hospital consolidation leads to higher costs without measurable improvements in quality. For example:
    • A 2018 Health Affairs study on consolidation trends in California found that the percentage of physicians in practices owned by a hospital increased from 25% in 2010 to over 40% in 2016, and that increases in vertical integration led to a 12% increase in Marketplace premiums, 9% increase in specialist prices, and 5% increase in primary care prices between 2013 and 2016.
    • A recent brief by the Committee for a Responsible Federal Budget outlined how increased consolidation in the health care market has led to less competition, an imbalance in negotiating power, and higher prices. For example, research has shown that provider consolidation has not led to improved quality or a reduction in costs, and many physician-hospital consolidation moves are motivated by enhanced bargaining power by reducing competition.
  • Without further action by Congress and/or the Administration, hospital consolidation is expected to continue and accelerate as a result of the COVID-19 pandemic.
  • There is an urgent need for Congress and the Administration to ensure that value-based care models are fully leveraged as an option to keep health care markets competitive.

PEPC proposed several recommendations for Congress and/or the Administration to take action, including:

  • Expand Medicare site neutral payment policies to additional services/procedures proven to increase in cost after a practice’s acquisition without an increase in quality.
  • Enforce information blocking regulations to ensure that patient information is not used as a strategic asset to retain patients.
  • Implement recent CMS regulations establishing a new Medicare/Medicaid Condition of Participation requiring event notifications to be shared with a patient’s provider of record when they go to the ER, or are admitted or discharged from the hospital, in a manner that requires hospitals to send notifications to a practice’s roster of patients.
  • Build new physician-led model options based on successful underlying chassis (e.g., CPC+, MSSP, etc.) to encourage providers to enter into value-based care models with predictable implementation and proven results.
  • Ensure options for providers to join entry-level value-based care models with a glidepath to greater amounts of risk and/or more sophisticated requirements while also clearly communicating the bridge or “off ramp” to another model at the end of the model test.
  • Revise regulations and/or pass legislation directing the Secretary to remove an ACO’s own beneficiaries from an ACO’s benchmark, thus putting rural and urban ACOs on even footing with respect to their ability to be rewarded for care improvements and cost reductions.

Read the full written testimony here.

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