President Joe Biden will issue an executive order Friday directing HHS to support price transparency rules issued by the Trump administration and telling the Federal Trade Commission (FTC) to prioritize hospital consolidation in its enforcement efforts.
The order will broadly focus on "promoting competition" in America and, in the healthcare sector, Biden will call for action on consolidation, hospital price transparency and drug pricing.
"Hospital consolidation has left many areas, especially rural communities, without good options for convenient and affordable healthcare service," a White House fact sheet about the executive order says.
The order will "underscore that hospital mergers can be harmful to patients and encourages the Justice Department and FTC to review and revise their merger guidelines to ensure patients are not harmed," the White House says.
Hospital companies have been criticized for their merger and acquisition practices, with consolidation accelerating at a rapid pace in recent years, often creating dominant regional and national systems.
While hospital leaders argue mergers create efficiencies that save money, studies show that consolidation leads to higher prices.
The FTC announced last week it would prioritize hospital mergers in its enforcement activity.
Biden will direct HHS to support existing regulations issued by President Donald Trump's administration, which require hospitals to disclose cash prices and rates negotiating with insurers. The hospital industry opposed this policy, which took effect Jan. 1, and many health systems are not complying with the rules. Just 17 of 100 randomly chosen hospitals had posted their prices, researchers reported in the Journal of the American Medical Association last month.
"Compliance could be limited because the penalties for noncompliance are minimal (maximum $300 per day) and the costs of disclosure potentially great," the study authors wrote.
CMS warned hospitals in May they could be fined if they don't start following the rules within 90 days.
Biden's order also calls for a number of actions on drug pricing, including directing the FDA to work with states on importing prescription medicines from Canada—another leftover Trump initiative—and encouraging the FTC to ban "pay-for-delay" tactics that brand-name drug companies use to avoid competition from generics manufacturers. HHS will also be directed to release a comprehensive plan within 45 days to lower drug prices.
The order encourages the FTC to ban or limit non-compete clauses that prevent workers from taking jobs at their current employers' competitors. The American Medical Association asked the FTC in 2020 not to limit non-compete agreements, arguing that several states already have rules in place or are considering establishing them. The AMA has tried to straddle both sides of the issue, noting that some employers can have viable business reasons for using non-compete agreements while acknowledging that these clauses pose challenges to physicians.
"Physician employment arrangements frequently include non-compete agreements, and the application of non-competes to physicians can raise issues regarding physician ownership, the patient-physician relationship, and patient access to care," AMA CEO Dr. James Madara wrote in a letter to the FTC last year.
"Physicians who are employers and owners in physician practices or leaders in integrated delivery systems may favor the use of reasonable non-competes, while physicians who are employees of practices, hospitals, health systems, or other organizations may have concerns about being subject to overly restrictive non-competes that limit employment opportunities and may impact patient access to care."
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