Providers weigh long-term risks, rewards of post-COVID collaboration

Despite having some of the fewest beds per capita in the country, Albuquerque-based Presbyterian Healthcare Services has been able to manage surges of COVID-19 patients by teaming up with its competitors.

Presbyterian, Lovelace Health System, University of New Mexico Health System and Christus St. Vincent Regional Medical Center established four hubs to centralize and coordinate care across northern and central New Mexico. Hub hospitals would support smaller facilities to keep care in their respective communities.

If a community hospital lacked a certain specialist, one could call in from the university to consult physicians over video. They monitored real-time data to assess shortages and hub hospitals would work with state and national authorities to direct testing equipment, staffing or supplies accordingly.

“These artificial walls came down,” said Dr. Denise Gonzales, medical director for telehealth and adult medical specialties at Presbyterian, adding that some organizations may have held onto emotional baggage from scuttled transactions. “We had an open and frank conversation with one another built around transparency. We met daily to discuss hospital capacity and contingency plans—it helped a great deal.”

Regional health systems are working together more than ever to combat COVID-19, and providers are hopeful the collaborative spirit will endure past the emergency declaration. But those that share too much data about prices, wages or costs could run afoul of antitrust laws.

“Providers should be careful,” said Beth Vessel, a partner at Waller Lansden Dortch and Davis. “They definitely shouldn’t give each other all their competitively sensitive information and integrate like they are one provider.”

Inpatient beds are scarce in New Mexico, and area providers needed a unique approach to manage COVID-19. The Land of Enchantment clocks in with only 1.8 hospital beds per 1,000 residents, tying it with Utah and Maryland, according to Modern Healthcare’s analysis of 2019 American Hospital Association data. Only Oregon and Washington state have fewer beds at 1.7 per 1,000.

“New Mexico is one of the most underbedded states,” Gonzales said. “Once we recognized that, we needed to stand up a hub-and-spoke model so we could load level across the state so that key systems could take care of populations that only they could take care of.”

The New Mexico systems set up data exchange portals via a common electronic health record system. Executives at hub hospitals spoke daily and relayed information to their respective “spoke” hospitals multiple times a week. They also managed a central command center that directed referrals, although there are limits under antitrust law in how those could be maintained, Clay Holderman, the former chief operating officer of Presbyterian, told Modern Healthcare in July. He has since taken a job at UnityPoint Health.

They also came up with a scoring tool that informed state officials on whether they should escalate or de-escalate state of emergency guidelines, Gonzales said.

“It is pretty unprecedented to have so much collaboration between a state entity and private delivery systems,” she said, adding that they worked with the governor, public health departments, the New Mexico Hospital Association as well as a number of other medical associations.

Similar to New Mexico, Iowa hospitals set up a transfer line, which was mainly supported by Clive-based MercyOne. Patients were directed to the closest hospitals that had beds available, which mitigated concerns that care would be disproportionately directed to certain hospitals, said Shawna Gunn, manager of operations at MercyOne Des Moines Medical Center, which is jointly operated by CommonSpirit Health and Trinity Health.

“Now that this framework has been developed, we can easily pull it together for influenza season or other scenarios,” she said. “COVID presented an opportunity for a new approach—we’re always looking at network integrity and improving our relationships with health systems.”

While the pandemic may justify collaboration among competitors like it has in New Mexico and Iowa, it won’t ease collusion provisions, regulators said.

The Justice Department and Federal Trade Commission issued a joint statement last March that the antitrust laws allow many types of collaboration. Partnering on research and development, sharing of know-how and most joint purchasing arrangements are generally acceptable under the antitrust laws, regulators said.

Healthcare facilities may need to work together to deliver resources and services to underserved communities and they may need to combine production and distribution efforts for things like personal protective equipment, the agencies said, noting that they should be “limited in duration.”

But antitrust agencies are prepared to take civil or criminal actions if employers suppress wages and benefits, reach no-poach agreements or share competitively sensitive labor data. Regulators said they will be keeping a close eye on any organizations that collude to increase prices, divvy up markets, lower wages, decrease output or reduce quality.

“The Antitrust Division will not tolerate companies and individuals who use COVID-19 to harm competition that cheats payroll and non-payroll workers,” Makan Delrahim, former assistant attorney general of the DOJ’s antitrust division said in prepared remarks. “This includes doctors, nurses, first-responders, and those who work in grocery stores, pharmacies, delivery and distribution networks, and warehouses, among other essential service providers on the front lines of addressing the crisis. Even in times of crisis, we choose a policy of competition over collusion. The division will use its enforcement authority to ensure that companies and individuals who distort the free market for labor are held to account.”

Sen. Amy Klobuchar (D-Minn.) proposed a bill that would increase the FTC and DOJ’s budget by about $300 million each. The Competition and Antitrust Law Enforcement Reform Act would also raise civil fines for antitrust violations, create an independent office of the competition advocate in the FTC and generally tighten the regulatory framework.

“That suggests there might be more investigations if they have more people to handle them,” Vessel said.

Still, the DOJ and FTC likely won’t delve too deeply into COVID-related partnerships as long as there isn’t any blatant anticompetitive behavior, she said, adding that healthcare companies should generally be all right if they aren’t sharing competitive information like prices or are colluding.

To mitigate risk, hospitals could ask for an advisory opinion from the FTC, which the agency can expedite. They should have a formal protocol that conveys what employees can and cannot do during these partnerships, Vessel said. They should also keep a record of what data they are and are not sharing.

Antitrust rules like the federal Emergency Medical Treatment and Labor Act, which was implemented in 1986 to prevent hospitals from transferring patients for financial purposes, are there for a reason, Gonzales said.

“There are opportunities there, but I certainly wouldn’t advocate for moving quickly,” she said. “You have to consider the unintended consequences from changing those policies.”

Gonzales said that the New Mexico hospitals are starting to wind down the frequency of their meetings as the number of COVID cases subsides. They’ll keep an eye on their capacity-scoring assessment and ramp up or down accordingly.
As far as the long-term prospect of working more closely with competitors, providers will likely revert to business as usual for the most part post-pandemic, Vessel said.

“I don’t think they’ll necessarily want to keep doing it; they want to compete with the other hospital,” she said.
When the emergency declaration ends, hospital administrators will start debriefing and incorporate all the lessons learned into their disaster response programs, Gonzales said.

“What will persist is a greater sense of collaboration and the capacity to exchange data quickly,” she said. “We did it first by necessity, but we have no reason to stop doing this.”