The U.S. Department of Justice (DOJ) announced last week that it is launching the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (HCMC). What effect will this have on the healthcare industry? Experts have varying opinions.
The HCMC will include civil and criminal prosecutors, economists, healthcare experts, technologists, data scientists, investigators and policy advisors, according to the DOJ’s announcement. It will look at several issues, including consolidation by payers and providers, serial acquisitions, the quality of care and medical billing. It is led by Katrina Rouse, an antitrust prosecutor who joined the DOJ’s Antitrust Division in 2011.
The launch of the task force comes at a time when healthcare spending is on the rise. In 2022, national health spending reached $4.5 trillion. Large corporations like CVS, Amazon and UnitedHealth Group have been buying physician practices, and the DOJ reportedly opened up an antitrust investigation into UnitedHealth Group recently.
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According to Seth Joseph, managing director of Summit Health Strategies, the last 10 years have “seen a race for size between payers and providers as both sides seek negotiating leverage.” Due to the complexity of the healthcare industry, a specialized task force is needed, he added.
“Within the industry, we know how different healthcare is. Regulatory environment. Complex reimbursement and economics. Conflicting incentives, information asymmetry and special interests. One of the problems with applying traditional antitrust rules in healthcare is that they got lost in the complexity,” Joseph said in an email. “We need an antitrust task force that truly groks health care and can figure out how to ensure every stakeholder is competing to serve the most important one: the patient.”
He added that it’s too early to say how the task force will affect healthcare consolidation and monopolies, but that it is an “encouraging step.”
Tyler Giesting, director of West Monroe’s healthcare M&A group, said the task force’s approach “seems intentionally broad.” This shows the task force is interested in addressing various types of anti-competitive behavior, instead of just focusing on payer and provider vertical integration.
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“We may see this new entity as another mechanism to address what the federal government sees as threats to the U.S. healthcare systems regarding quality, cost, or durability,” Giesting said.
However, another industry expert argued that the task force may not be looking at the right issue.
“Health economy stakeholders will undoubtedly welcome clarity from the HCMC about permissible consolidation in an industry awash in duplicative services,” said Hal Andrews, president and CEO of Trilliant Health, in an email. “Even so, what health economy stakeholders need from HCMC is not a singular focus on the *price* that employers, consumers and CMS pay for healthcare – which has almost zero correlation with *charges.* Instead they need a comprehensive framework to address the tension between the need for consolidation to eliminate the inevitable waste from duplicative services and the desire to avoid the potential increases in *price* that can result from consolidation.”
Andrews noted that while it’s widely believed that monopoly markets have higher prices, CMS’s Transparency in Coverage initiative shows that the three most competitive markets (New York, Los Angeles and Chicago) actually have higher prices than monopoly markets.
The DOJ, however, seems to believe that targeting healthcare monopolies is necessary.
“Every year, Americans spend trillions of dollars on health care, money that is increasingly being gobbled up by a small number of payers, providers and dominant intermediaries that have consolidated their way to power in communities across the country,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division in a statement. “Led by Katrina Rouse, the task force will identify and root out monopolies and collusive practices that increase costs, decrease quality and create single points of failure in the health care industry.”
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