The U.S. Department of Justice (DOJ) just announced the formation of the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (HCMC). But can this task force really change the landscape of the healthcare industry? Opinions from experts vary widely.
The newly formed HCMC will consist of a diverse team including civil and criminal prosecutors, economists, healthcare experts, technologists, data scientists, investigators, and policy advisors. Their focus will be on critical issues such as consolidation by payers and providers, serial acquisitions, quality of care, and medical billing. Leading this task force is Katrina Rouse, an antitrust prosecutor with significant experience after joining the DOJ’s Antitrust Division in 2011.
This initiative comes at a time when healthcare spending in the U.S. is continually increasing. In 2022, national health spending reached a monumental $4.5 trillion. Major corporations like CVS, Amazon, and UnitedHealth Group have been aggressively acquiring physician practices. Notably, the DOJ has initiated an antitrust investigation against UnitedHealth Group recently.
Seth Joseph, managing director of Summit Health Strategies, highlights the ongoing competition for size between payers and providers over the past decade as both sides strive for negotiating power. Given the intricacies of the healthcare sector, Joseph emphasizes the necessity of a specialized task force to effectively address the industry’s complex landscape.
According to Joseph, traditional antitrust regulations often struggle within the healthcare domain due to its unique regulatory environment, complex reimbursement and economics, conflicting incentives, information asymmetry, and various special interests. He stresses the importance of having an antitrust task force that comprehensively understands healthcare to ensure all stakeholders compete to prioritize the patient’s well-being.
While the exact impact of this task force on healthcare consolidation and monopolies remains uncertain, Joseph views this development as a positive and promising step in the right direction.
Tyler Giesting, director of West Monroe’s healthcare M&A group, notes that the task force’s broad approach signals its intent to address various forms of anti-competitive behavior, not solely focusing on payer and provider vertical integration.
On the other hand, Hal Andrews, president and CEO of Trilliant Health, raises a critical point by suggesting that the task force may not be targeting the most crucial issues at hand. He advocates for a broader framework beyond just pricing concerns, emphasizing the need for a comprehensive strategy to address the balance between consolidating to eliminate redundant services’ inefficiencies and the potential price hikes resulting from consolidation.
It is worth noting that while monopolistic markets are often associated with higher prices, Andrews points out that competitive markets like New York, Los Angeles, and Chicago actually exhibit higher prices based on CMS’s Transparency in Coverage initiative.
Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division underlines the urgency of tackling healthcare monopolies. He emphasizes the negative impact of a small number of powerful payers, providers, and intermediaries monopolizing the industry, leading to increased costs, reduced quality, and creating vulnerabilities within the healthcare sector.
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