The US hasn’t enforced its antitrust laws enough in the healthcare industry, top Justice Department officials said, voicing particular concern about consolidation among groups of doctors and nurses.
“We are becoming more lucid to under-enforcement in healthcare,” Doha Mekki, the No. 2 official in the Justice Department’s antitrust division, said during a Bloomberg roundtable on Wednesday. The US has roughly 2,000 fewer hospitals today than existed in 1998, she said.
Mekki didn’t name specific companies. But antitrust enforcers have been scrutinizing UnitedHealth Group Inc., the largest US health insurer, and its move to buy up doctor groups across the US.
On Thursday, the Justice Department said it’s creating a new unit focused on healthcare monopolies. The task force on healthcare monopolies and collusion will investigate and engage in policy advocacy related to the healthcare industry, with a focus on consolidation, labor and quality of care, access and misuse of healthcare data, the agency said in a news release.
The company has expansive reach across the health care system offering insurance coverage for more than 47 million Americans. Meanwhile, UnitedHealth’s services arm, Optum, provides a variety of services including home health, prescription drugs and the largest electronic data clearinghouse for insurance reimbursements, Change Healthcare. The Justice Department unsuccessfully sought to block UnitedHealth’s acquisition of Change, whose computer systems faced a crippling cybersecurity hack in February that affected one in three Americans.
The agency is also reviewing UnitedHealth’s proposed $3.29 billion takeover of Amedisys Inc. and is likely to review its proposed acquisition of Steward Medical Group Inc., the physician group associated with struggling for-profit health system Steward Health. The hospital chain, which filed for bankruptcy on Monday, is partly owned by Medical Properties Trust Inc.
UnitedHealth, in a statement, said that the company is organized to reduce “fragmentation by establishing value-based care models that better coordinate and align incentives among caregivers, payer and pharmacy offerings.”
Susan Athey, DOJ’s chief antitrust economist, said the “huge wave” of consolidation in the hospital and health insurer space raises questions about whether consumers have enough choice. For example, if a health insurer makes a mistake on a bill and denies coverage even though a patient is covered, the consumer is caught in limbo between the hospital and the insurer, she said.
“Somebody who is sick or elderly might have months of dealing with this problem afterwards,” Athey said. “But how do you shop for that? So do we have meaningful competition?”
More than 75% of Americans live in highly concentrated hospital markets, said Athey, citing a White House report, adding that in 44 states there are three or fewer insurance options.
(Updates with UnitedHealth comment in seventh paragraph.)
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