“It is our strong contention that the agencies must have merger guidelines that protect physicians against health insurer mergers that may substantially lessen competition for the purchase of physician services and that degrade physician working conditions,” AMA CEO and Executive Vice President Dr. James Madara wrote.
The Blue Cross Blue Shield Association, by contrast, expressed its support of federal efforts to look more closely at consolidation among providers.
“While some healthcare provider mergers and acquisitions claim to improve efficiencies, improve access and affordability and/or enhance financial sustainability, one motivation is plainly to enhance the providers’ ability to extract price increases from insurers,” wrote Kris Haltmeyer, vice president of legislative and regulatory policy at the association.
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The Colorado Consumer Health Initiative, a nonprofit health advocacy organization in favor of the draft guidelines, said healthcare consolidation writ large has led to higher prices that result in some Coloradans delaying care or accruing medical debt. The group added that consolidation has had a disproportionate impact on low-income residents and people of color.
National Nurses United and the Service Employees International Union offered overwhelming support for the draft guidelines in their comments, saying hospital mergers can harm working conditions and care delivery. They said consolidation within healthcare has left some workers with few job options.
“In many geographic areas, all the hospitals are controlled by a small number of health systems. This concentration gives workers few options for employment in their field,” wrote Michelle Grisat, national director of health and regulatory policy at National Nurses United.
The union, which represents registered nurses, recommended the FTC consult with unions about a proposed deal’s effect on labor and confirm that a merger doesn’t reduce union density in a market or prevent workers from collective bargaining.
Staunch opposition from hospital groups
Hospital groups slammed the proposed criteria, saying they would undermine the value consolidation has had for their members.
The American Hospital Association, Federation of American Hospitals and America's Essential Hospitals said they oppose federal efforts that would increase oversight of healthcare deals. They recommended against finalization of the draft guidelines.
The AHA said the proposed guidelines undervalue cost savings and other efficiencies that drive hospital transactions. The association also said the would-be guidelines fail to provide meaningful direction to hospitals considering a merger and would allow the agencies to arbitrarily kill a deal.
“A general counsel advising her CEO about a potential merger could not provide sound advice based on these draft guidelines,” AHA General Counsel and Secretary Melinda Hatton wrote.
The group also pointed to mounting economic challenges facing the industry as a reason to nix the draft guidelines. Rising costs of labor, medications and supplies have put a dent in many hospitals' bottom lines.
“Given these challenges, many hospitals may find a strategic combination to be the only way to keep their doors open,” Hatton wrote.
America’s Essential Hospitals said the agencies are overlooking the potential benefits of mergers, such as stronger recruitment and retention initiatives, larger investments in technology and equipment, and better access to specialty services.
“When safety net facilities merge with other providers, they can bring healthcare resources, including specialty care, social services, and new technology, into underserved communities that previously lacked these services,” America's Essential Hospitals President and CEO Dr. Bruce Siegel wrote.
The Rural Hospital Coalition, which represents nearly one-fifth of all rural hospitals, expressed concern that nearly all mergers could be considered anticompetitive in a rural healthcare market under the proposed guidelines.
“Rural hospitals markets are distinct from other markets in that there are very few competitors, and these hospitals may already represent a large market share prior to a merger because they are often the only hospital in a given region,” the group wrote.
If the agencies finalize the guidelines as-is, experts say companies unable to take on risk could feel the brunt of the changes.
“The greatest impact will be on activities by small and mid-sized entities that don't have the resources to contest a challenge by the FTC. It's those companies that will be forced to think twice or three times about any contemplated transaction,” said Michael Abrams, managing partner of healthcare consultancy firm Numerof & Associates.