The call to rein in giant healthcare corporations isn't just coming from the left.
Conservative lawmakers on Capitol Hill are growing increasingly vocal with their own demands to crack down on consolidation and vertical integration in the industry, spurred on most recently by the Change Healthcare ransomware attack.
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A House Energy and Commerce Committee hearing last Tuesday regarding the incident — which has disrupted provider and payer operations for weeks — largely focused on cybersecurity. But frustration also boiled over at the size and scope of UnitedHealth Group and its subsidiary Optum, which bought Change in 2022 over the initial objections of the Justice Department.
"The vertical integration is a travesty," Rep. Diana Harshbarger (R-Tenn.), a pharmacist, said during the session last Tuesday.
Others from the Republican side of the committee who voiced similar complaints were Reps. Buddy Carter from Georgia, another pharmacist, and Dr. Larry Bucshon of Indiana.
While the Change Healthcare attack offered a fresh focus, such sentiments are on the rise as consolidation has swept most realms of healthcare. A briefing on provider concentration released last week by policy think tank KFF found 428 hospital and health system mergers were announced from 2018 to 2023, and in 2022, 41% of physicians worked for a hospital or health system, up from 29% in 2012. Meanwhile, just three companies control roughly 80% of the pharmacy benefit manager market.
Some conservative Republicans over the past several years have joined with left-leaning progressives to advance legislation targeting major healthcare corporations and push for federal agencies to investigate what lawmakers see as anti-competitive behavior.
Many significant bills have focused on the pharmacy benefit manager market dominated by CVS Health, Cigna and UnitedHealth Group subsidiaries. Other broadly supported concerns have surfaced around anti-competitive contracts, hospital consolidation, transparency and facility fees.
It's not that Republicans are about to join any pushes for single-payer healthcare anytime soon — many blame the Affordable Care Act for imposing regulatory burdens that cause consolidation — but the more populist strain of the party is finding allies on the left. The trend makes a certain amount of sense, even in hyper-partisan times, said Larry Levitt, the executive vice president for health policy at KFF and a longtime observer of healthcare politics.
"Conservatives support market-oriented approaches to healthcare," Levitt said. He noted many of the conservatives most fed up with growing corporate healthcare power are medical professionals.
"While regulating anti-competitive practices involves government intervention, which conservatives tend to loathe, they may see it as preferable to even more heavy-handed interventions like price controls," he said.
That's the rational explanation, but many lawmakers express uncommon fervor regarding the subject when given the chance.
Sen. Dr. Roger Marshall (R-Kan.), asked recently if he had a moment to talk about consolidation in healthcare while he was rushing to a Republican caucus lunch, stopped dead and asked, "How much time do you have?"
Marshall pulled out his phone, opened his photo app, and started flicking through images that illustrate consolidation in the healthcare industry.
"This is a chart that we've made. This is not something I borrowed," Marshall said, holding one up showing the reach of UnitedHealth Group and its subsidiaries.
He compared the health giant to the massive oil company that the Supreme Court ordered broken up in a landmark 1911 antitrust case.
"United is the Standard Oil of our lifetime, on steroids. So it's horrible. It's a horrible situation," said Marshall, who was a co-sponsor with Sen. Bernie Sanders (I-Vt.) on the Bipartisan Primary Care and Health Workforce Act of 2023, which among other things targeted facility fees — higher rates charged at hospital-owned clinics — and potentially anti-competitive contracting practices.
UnitedHealth Group declined to respond to requests for comment.
Carter, the Georgia Republican, said in an interview that he came to Congress a decade ago in large part because of healthcare consolidation, which he said has only grown worse.
"The first thing I did was go to the [Federal Trade Commission] and ask them to look at vertical integration that exists in the drug pricing chain, where the insurance company owns the PBM that owns the group purchasing organization that owns the pharmacy that owns the doctor," Carter said, describing himself as a populist.
The FTC is more heavily scrutinizing healthcare deals and recently put out a call for people to report problems.
"I'm voting for Teddy Roosevelt, and I'm telling you, because he will bust it up," Carter said, appearing to only be half joking. "He can do a better job dead than these people can alive, but we need to bust it up. I'm not voting for Teddy Roosevelt, I'm voting for Donald Trump, but nevertheless, you get my point."
Similarly, Marshall said he’s more like Roosevelt’s bull moose than the classic conservative who wants government's hands off everything. "I love capitalism, but capitalism without competition is meaningless. It's death. It's horrible," Marshall said. "So we need to break something, this needs to be broken up."
Sen. Mike Braun (R-Ind.) has also worked with liberals, including Sen. Elizabeth Warren (D-Mass.) on anti-competitive practices and Sanders on transparency.
"Everybody wants to be the oligopoly or the monopoly, but most markets just don't work that way, and thank goodness. Because I've never seen that get better and less expensive — it generally gets worse and more expensive," Braun said. "All I'm asking for is transparency, competition, get rid of the barriers to entry and create an engaged, aware, knowledgeable consumer. Those are the definitions of free markets."
Sen. Chuck Grassley (R-Iowa), has been among the louder critics of PBMs. The long-serving senator said in an interview that a genuine desire for classic competition is what is pushing some of his fellows to line up with the left.
"It's because of our free-market philosophy," Grassley said. "We want competition to work to keep prices down."
Grassley and Carter said they asked the FTC to investigate vertically integrated PBMs over drug-pricing practices more than a year and a half ago. FTC Chair Lina Khan said in a roundtable with reporters Tuesday that the agency would begin releasing results from that probe in one to three months.
Senate Health, Education, Labor and Pensions Committee Chair Sanders, who had been scheduled to give a talk on healthcare with Marshall in Kansas over the weekend before it was delayed by national security votes Saturday, said Republicans are coming to align with him on such issues because they also hear about them back home.
"They represent people who will tell them that the quality and cost of healthcare is deteriorating in their communities, and Wall Street and these investment firms are one of the reasons," Sanders said.
Still, conservatives as a whole are not all in. According to Braun, many of his Republican colleagues are reluctant to target what they see as a free market.
Former healthcare executive Sen. Rick Scott (R-Fla.) said he was not for enacting more government restrictions, even though he agreed that too much consolidation was harmful.
"I think [consolidation] has an impact of stifling innovation and people that are trying to control costs," Scott said, noting that the PBM he ran when he was still in the private sector was, at the time, one of the largest in the country.
"I'm not sure what government can do" about concentration in the industry, he said, arguing he'd favor solutions such as offering incentives to consumers to shop around and encouraging the growth of the healthcare provider workforce.
And while Sen. Dr. Bill Cassidy (R-La.), the ranking Republican on the HELP Committee, has voted for some transparency measures and reforms, he has also offered at least qualified support for growing private equity involvement in the sector. In a hearing last summer, he said the trend can spur innovation.
Exactly how far reform-minded Republicans can go will get a near-term test after the November election, when Congress faces numerous end-of-year healthcare program deadlines. Among them are funding federally qualified health centers, preventing steep cuts in disproportionate share Medicaid payments, and renewing enhanced payments for rural providers. Lawmakers tried several times in the past six months to attach conservative-backed bipartisan healthcare bills to those so-called extenders. Legislation on PBMs, price transparency, site neutrality, anti-competitive contracts and more all fell out of final bills amid the difficult negotiations to keep government funded.
After the election is over, most observers believe Congress members will again try to advance a big healthcare bill that at a minimum reflects the Lower Costs More Transparency Act of 2023, which passed the full House and included various transparency measures, PBM reforms and a tightening of some site-neutrality rules.
While Congress is notoriously hard to predict of late, Braun and Carter both said they see signs more Republicans will get on board. Carter hears the same kind of comments that Braun does about protecting the private sector, but as Sanders suggested, he believes constituents are fed up.
"There comes a point where you have to step in," Carter said, adding that he got there by listening to customers back home who couldn't pay for their prescriptions.
"I was the one who had to tell the senior citizen how much their prescription was and watch them make a decision between paying for their medicine or paying for their groceries. I was the one who had to go tell the mother how much [her] child's antibiotic was and watch her in tears," Carter said. "That's why I set as my goal is to do something about it."
Industry groups have broadly opposed legislation to regulate business practices — saying that it could limit access — and pushed back against claims that consolidation raises prices. The American Hospital Association referred Modern Healthcare to previous comments regarding healthcare-related policy-making.
A spokesperson for the Pharmaceutical Care Management Association, which represents PBMs, said the number of companies operating in the U.S. has increased in the last few years.
"The PBM market is extremely competitive, and employers and health plans have the flexibility and choice to choose the pharmacy benefit design that works best for their business," the spokesperson said.
