House hearing examines consolidation, competition in health care markets

Hospitals and health systems are responding to the rapidly changing health care landscape by coming together to build coordinated networks of care to benefit patients and communities, AHA said today in a statement submitted for a House hearing examining the effects of health care consolidation.
 
“While various forms of affiliation are being pursued, mergers and acquisitions can be an effective means for making progress toward meeting the aims of value-based population health,” AHA said. “This realignment is a direct response to the changing needs of communities for more convenient care, continuous financial pressures to reduce costs and the ever-present drive to improve quality for patients.”
 
AHA said three reasons that changes are occurring in the hospital and health system field are to:
 
Build sustainable, coordinated networks of care with the scale and scope to allow them to innovate while benefiting patients and communities.

Enable hospitals and health systems to try to compete with highly-capitalized tech giants and other large companies often without roots in, or obligations to, the communities served.

Create a platform to advance efforts to improve quality and access through innovation and strategy that can reduce costs and enhance convenience for the entire community.
 
At the hearing before the House Committee on the Judiciary’s Subcommittee on Antitrust, Commercial and Administrative Law, a panel of academic witnesses discussed various effects of consolidation and anticompetitive conduct in health care markets.
 
In its statement, AHA pushed back on a number of studies cited frequently on this issue calling them “seriously flawed,” and often lacking data on the largest health insurance companies in virtually every market. “The studies appear to be largely academic exercises with little probative value for policymakers at every level, which routinely fail to examine the impact of widespread consolidation in health insurance markets and the impact of dominant commercial health insurers on prices and innovation.”
 
Instead, AHA pointed to an analysis by economists at Charles River Associates that found hospital mergers can result in efficiencies that unleash savings, innovation and quality improvement essential to transforming health care delivery.
 
For more, see an AHA Stat Blog from AHA General Counsel Melinda Hatton, and view the AHA webpage for additional resources on the issue.