Although the Trump administration could shake up the healthcare market with plans to repeal and replace the Affordable Care Act, antitrust enforcement agencies will see few changes that could impact their aggressive stance against major consolidation in the industry.
Since the George W. Bush administration, the U.S. Department of Justice and Federal Trade Commission have been more active in antitrust enforcement, conducting extensive merger reviews and bringing more cases in federal and administrative courts to challenge prospective deals, both in healthcare and other industries.
That trend is likely to continue in a Trump administration as the agencies have established their own momentum in protecting consumers and competition via aggressive antitrust enforcement. According to Bill Horton of law firm Jones Walker, only a major change from the top down could shift that balance, and it's unclear whether President Donald Trump would make those kinds of changes to the agencies.
“The one thing we can say with confidence about a Trump administration is who knows what promises that have been made will be pursued, let alone accomplished,” he said. “This is the hardest thing to predict. When you have someone who has essentially taken multiple positions on everything, I'm not sure how you determine what will be the position taken.”
Trump and his companies have never been the subject of an FTC or DOJ merger enforcement lawsuit, though he has run up against their antitrust enforcement action in 1988. In that case, the agencies alleged he violated the Hart-Scott-Rodino Antitrust Improvements Act by acquiring stock in two gaming companies without alerting regulators. He settled the suit and paid a civil penalty of $750,000.
Trump has made few comments about antitrust enforcement over the years, and those have typically revolved around media and technology competition issues. His healthcare platform has taken a more populist approach, emphasizing a repeal and replacement of the ACA and promoting individual and small-business interests.
Those populist views could signal that Trump would be against aggregating market power in mega-mergers, according to law firm Manatt Phelps & Phillips' Lisl Dunlop.
“You could see the FTC and DOJ continuing to have the mandate to focus resources on healthcare,” she said. “I think the focus is going to be fairly intense on the insurance sector, given that will be such a centerpiece of whatever they replace the ACA with.”
If the trial docket slows down in the healthcare arena, that could be due to fewer merger and acquisition deals thanks to the current consolidated market, according to experts. “It is somewhat cyclical,” said Bill Berlin of law firm Hall Render Killian Heath & Lyman.
The hospital merger and acquisition landscape has started to slow down already, although it's unclear if the rest of the healthcare industry will follow suit, said Chris Raphaely of Cozen O'Connor, who believes Trump's moves to repeal and replace the ACA and other healthcare positions could indirectly impact antitrust enforcement in the space.
“He has mentioned allowing insurance companies to do business across state lines, which might lead one to think that he's going to be more tolerant of consolidation than his predecessor might be,” Raphaely said.
An ACA repeal could also change healthcare marketplaces, which could shift the balance in antitrust market reviews, a hot issue in recent FTC merger challenges against the proposed Penn State Hershey Medical Center-PinnacleHealth and Advocate-North Shore deals.
Antitrust isn't a particularly partisan issue, nor is it an issue that Trump has spoken about much. Conservatives tend to be less active regulators as they want government to get out of the way of the free market, but antitrust enforcement is seen as pro-competitive. The lines between political philosophies have been blurred in healthcare merger reviews. Conservative antitrust scholars actually promoted more competition reviews in the industry because they believed a more robust enforcement regime would keep prices down and help consumers, Horton said.
“It's just not quite as straightforward an issue on a conservative-liberal split as some things are,” he said.
What's more, DOJ's antitrust division and the FTC can be fairly insulated from political shifts. Trump will appoint an assistant attorney general to run the antitrust division and will nominate commissioners to fill empty FTC slots, but antitrust is an area where experienced career staff play a significant role in developing cases and determining game plans, said Alston & Bird's Leslie Overton, who worked in the antitrust division during the Bush and Obama administrations.
“During my time serving in both the Bush administration and the Obama administration, the independence of antitrust enforcement including healthcare antitrust enforcement was respected,” she said.
Although Trump has hinted at taking a more active role in law enforcement issues, such as directing a special prosecutor to investigate Hillary Clinton's email scandal, experts say he would take a real risk if he dove into DOJ issues, especially in the antitrust division.
“The staff prides itself on their independence,” said George Hay, a professor at Cornell Law School. “They're professionals. A president who sought to be a very active interventionist would demoralize staff.”
Although experts don't anticipate much of an antitrust enforcement change under Trump, cases could dwindle if the new administration cuts resources. Trump seemingly has advocate a smaller federal government, and he could try to shrink the federal payroll through hiring and wage freezes. “You could literally have less resource in dollars and manpower that could be used to challenge all mergers,” Berlin said.
“The real bottom line though is a great unknown, as are most pieces of his entire administration,” Berlin said.