The Federal Trade Commission and U.S. Justice Department are rejecting claims by the nation's major hospital groups that a workshop on healthcare competition was one-sided and derisive toward hospitals.
It's a dispute experts say is symptomatic of deep tensions between the government and hospitals over reforms in the age of the Affordable Care Act.
The FTC and the Justice Department's Antitrust Division defended their recent two-day joint workshop, Examining Health Care Competition, in a letter dated April 1. The stated goal of the workshop was to help them better understand the dynamics of healthcare competition and payment models.
“Achieving balance and diversity of viewpoints was and remains a high priority for the workshop planning team, comprised of staff from both the FTC and Antitrust Division,” according to the letter, signed by Marina Lao, director of the FTC's Office of Policy Planning and Robert Potter, the chief of the Antitrust Division's legal policy section. “The February workshop was but one step in engaging stakeholders in an ongoing discussion of competition in the health care industry.”
The letter, however, was in response to a missive from hospital groups sent two weeks earlier blasting the workshop for featuring speakers critical of hospital consolidation, a dearth of hospital representatives and “hostility to hospitals.”
The groups that signed the letter include the American Hospital Association, the Association of American Medical Colleges, the Catholic Health Association of the United States, the Children's Hospital Association and the Federation of American Hospitals.
“The Workshop's apparent lack of objectivity and balance deprived policymakers of the opportunity to better understand the strides the hospital field is making in transforming the delivery of healthcare in response to many market factors and how various types of transactions are essential to achieve that goal,” according to the letter from the hospital groups. “As a result, we believe that the workshop did a disservice to its stated fact-finding mission, to the entire hospital field, and to the patients whose care benefits from the changes and innovations that are occurring.”
The hospital groups' letter goes on to say that most speakers failed to recognize the benefits of healthcare consolidation, focusing only on feared increases in price or leverage. They said “there was hardly any mention” of consolidation benefits such as saving failing hospitals and quality improvements.
The groups also said the workshop included only one speaker representing a hospital system and only one economist who has worked closely with hospital clients.
The federal agencies, however, said in their response last week that they reached out to 14 hospital systems or representative organizations but many declined to take part. They also pointed out that those who that participate included a director of the Healthcare Financial Management Association, a senior executive at San Diego hospital system Sharp HealthCare and a consulting economist and private-sector attorneys who have worked on behalf of hospitals.
“Even though a number of your members chose not to participate, the workshop included hospital perspectives,” the federal officials said in the letter.
Some experts called this latest dust-up between hospitals and the agencies no surprise.
“The Federal Trade Commission and the Department of Justice are looking for assorted ways to inject competition into healthcare markets and it is never surprising that market leaders are generally unenthusiastic about the introduction of more competition,” said Barak Richman, a professor of law and business administration at Duke University's law school.
Richman said hospitals have long been one of the primary targets of American antitrust policy.
Jeff Miles, of counsel with Ober Kaler law firm, said he listened to the last two presentations of the workshop and did feel that they were biased toward the government's side based on the speakers and their backgrounds. But at the same time, he said, if the agencies truly did reach out to more hospital representatives without success, “you certainly can't blame the agencies.”
Miles said he expected providers might object to the tone and speakers of the workshop.
“I think the AHA, in particular is quite upset at the way these provider merger cases are coming out and is very anxious to find some way to convince the agencies that they are overly aggressive, particularly in light of the Affordable Care Act,” Miles said.
There's often been disagreement between providers and the agencies before, he said, but “I can't recall anything quite this vociferous.”
The flap between the hospitals and agencies comes amid a number of high-profile challenges to healthcare consolidations. Hospitals, health systems and physician groups have been consolidating rapidly in recent years, often characterizing the deals as necessary to deliver higher quality care at lower costs and live up to the demands and spirit of the Affordable Care Act.
They must do so, however, without running afoul of antitrust laws. .
Idaho's St. Luke's Health System recently asked the U.S. Court of Appeals for the 9th Circuit to rehear its case before a full panel of judges after that court decided in February that the system violated antitrust laws when it acquired a physician group. The system had argued the acquisition would help it improve care, but the plaintiffs, which included the FTC, Idaho and competing systems, said it would lead to higher prices.
The FTC also recently said it needed more time and information to examine a proposed merger between Illinois systems Advocate Health Care and NorthShore University HealthSystem. It's a request that comes amid what some experts say is a broader effort by the FTC to apply more scrutiny to deals between hospitals in adjoining markets.
Toledo, Ohio-based health system ProMedica has appealed its case to the U.S. Supreme Court as part of a fight to keep a suburban hospital it acquired in 2010. A district judge and the 6th U.S. Circuit Court of Appeals have concluded that the deal violated federal antitrust law.
