Mergers &amp; Acquisitions https://www.aha.org/ en AHA Senate Testimony on “Antitrust Applied: Hospital Consolidation Concerns and Solutions” https://www.aha.org/testimony/2021-05-19-aha-testimony-antitrust-applied-hospital-consolidation-concerns-and-solutions <span class="title">AHA Senate Testimony on “Antitrust Applied: Hospital Consolidation Concerns and Solutions”</span> <span class="uid"><span>Matthew Diener</span></span> <span class="created">May 19, 2021 - 10:53 AM</span> <div class="body"><p>Good afternoon Chair Klobuchar, Ranking Member Lee and members of the Subcommittee. I am Dr. Rod Hochman, Chair of the American Hospital Association ’s (AHA) Board of Trustees and I am pleased to be here today representing our nearly 5,000 member hospitals, health systems and other health care organizations across the country. On behalf of the AHA I thank you for your support as our hospital and health system teams cared for the millions of patients with COVID-19 over the past year and a half. Our hospitals and health care workers are heroes and they continue to serve on the front lines of this pandemic as we gather today.</p> <p>I have served in the medical field for 42 years as an immunologist and rheumatologist and I currently serve as president and CEO of Providence, a 52-hospital, integrated, not-for-profit health system located throughout the West — from Alaska to Texas.</p> <p>I know we have a shared commitment to ensuring patients have access to the lifesaving care that caregivers in our hospitals provide. I am particularly pleased to have the opportunity to share with you how our caregivers at hospitals, and hospital systems in particular, serve patients and communities around the nation, in addition to their heroic efforts on the front lines of the COVID-19 pandemic. I’ve known for a long time, but COVID-19 has underscored, that hospitals are the lifeline of our communities. We are this nation’s most trusted public health safety net.</p> <p>Hospitals continue to care for all the patients who walk through their doors and to meet the challenges present in the communities they serve. Whether those challenges include a surge in COVID-19 patients, treating victims of addiction, mass violence, accidents or natural disasters, or an increase in maternal deaths or cancer, hospitals are stalwarts of their communities. Serving all of these community needs — and many others — requires more integration than ever. Integration is necessary to assure that both the human and financial capital is available to stand up, reconfigure or even reimagine the services needed and how best to deliver them in a field facing increasing competition.</p> <p>The hospital field is awash with new entrants, such as commercial health insurers that own physician practices and technology companies offering services that compete with those provided by integrated hospital systems. Many of those competitors do not play by the same rules as hospitals and health systems or even pretend to serve the entire community. This increases the pressure on integrated hospital systems to fill in the gaps for a ragged public health infrastructure and to serve everyone in the community, including those the technology companies would leave behind.</p> <p>Hospital mergers and acquisitions also enjoy an enormous amount of scrutiny from the federal antitrust agencies and state attorneys general. The AHA has been critical of the approach and framework the Federal Trade Commission (FTC) has employed to review hospital transactions. The FTC continues to challenge any transaction it believes presents anticompetitive risks and until recently had an impressive track record in the courts. However, the transactions challenged publicly only tell part of the story as the FTC has many tools to discourage hospitals moving forward with a transaction before it gets to court.</p> <p>There are many reasons for mergers and acquisitions in the hospital field. Often they are prompted by financial pressures that can limit a hospital’s ability to marshal the resources needed to effectively care for its community, especially small and rural critical access hospitals. The numbers alone tell the story: 136 rural hospitals have closed since 2010, <sup><a href="#fnvi">i</a></sup> inpatient admissions have been declining for years, and Medicaid and Medicare rates are perpetually below the cost of providing care. Those combined underpayments amounted to $75.8 billion in 2019, according to the AHA.</p> <p>At the same time, hospitals’ expenses continue to grow. Prescription drug spending per hospital admission increased 18.5% between fiscal years 2015 and 2017.<sup><a href="#fnii">ii</a></sup> Private staffing firms and agencies are leveraging workforce shortages to drive up labor costs, a trend that has been exacerbated dramatically by the COVID -19 pandemic — a topic AHA requested the FTC investigate to no avail.<sup><a href="#fniii">iii</a>, <a href="#fniv">iv</a>, <a href="#fnv">v</a></sup></p> <p>Commercial health insurer consolidation contributes substantially to increasing providers costs in ways that do not benefit consumers. Seventy-four percent of metropolitan statistical area (MSA)-level markets were highly concentrated in 2019, up from 71% in 2014.<sup><a href="#fnvi">vi</a></sup> In fact, in nearly half of all markets (48%), one insurer’s share is at least 50%. And peer-reviewed studies have found that when an insurance market is highly concentrated, insurers reduce provider payments and do not pass savings along to the consumer.<sup><a href="#fn vii">vii</a></sup> In addition, some of the insurers are using leverage gained by acquisitions that went unchallenged by the federal antitrust agencies to increase costs for hospitals and health systems with myriad rules that create hurdles to care. These do not benefit patients and needlessly increase hospitals’ costs. <sup><a href="#fnviii">viii</a></sup></p> <p>As health insurers have grown they have diversified their health care portfolios to provide products and services in ways that circumvent medical loss ratio limits on profit, including in technology, analytics, pharmacy and care delivery. For example, UnitedHealth Group directs a substantial amount of premium dollars to itself through growing network of employed, affiliated and managed providers — it currently has 53,000 providers and plans to grow by at least 10,000 more by the end of this year.<sup><a href="#fnix">ix</a></sup> And insurers’ acquisition of pharmaceutical benefit managers are contributing to the increase in hospital and health system drug spending. In fact, three of the largest pharmacy benefit managers are owned by health insurers: Caremark (CVS Health), Express Scripts (Cigna), and OptumRx (UnitedHealth Group).<sup><a href="#fnx">x</a></sup></p> <h2>The Benefits of Being Part of a Health System</h2> <p>Being a member of a health system brings measurable benefits to patients and health system employees: lower health care costs, improved patient care, better access to health care providers, and increased investment in technology and equipment.</p> <h3>Lower Health Care Costs</h3> <p>Mergers with larger hospital systems can provide community hospitals the scale and resources needed to decrease costs.<sup><a href="#fnxi">xi</a></sup> Various studies confirm that increased administrative efficiencies and reduction of redundant or duplicative services contribute to merger-related cost reductions.<sup><a href="#fnxii">xii</a>, <a href="#fnxiii">xiii</a></sup></p> <p>For example, hospital mergers between 2009 and 2014 “were associated with a 2.5% reduction in operating expense per adjusted admission at the acquired hospitals.”<sup><a href="#fnxxiv">xiv</a></sup> And extending the analysis through 2017 finds a 2.3% reduction in annual operating expenses per admission at acquired hospitals, and an approximately 1.5% to 3.5% reduction in total expenses through consolidation of administrative and supply chain operations. <sup><a href="#fnxv">xv</a></sup> Another study of hospital transactions between 2000 and 2010 found “evidence of economically and statistically significant cost reductions at acquired hospitals” averaging between 4% and 7%.<sup><a href="#fnxvi">xvi</a></sup></p> <p>Moreover, additional substantial savings come from improved information technology (IT) systems and advanced data analytics. Consolidated hospital systems can often better invest in IT infrastructure for both clinical and financial data that can then be used to identify best practices for more cost-effective, integrated and streamlined care.<sup><a href="#fnxvii">xvii</a></sup> These data systems have substantial but largely fixed costs, making them effectively inaccessible to independent hospitals. Hospital systems can spread the costs over a larger patient population while also performing more sophisticated analyses given the larger patient database to identify patterns and improve care. In a survey of hospital executives involved in mergers, implementing or upgrading clinical information systems was the most common use of new capital received by the acquired hospital.<sup><a href="#fnxviii">xviii</a></sup></p> <p>In addition, hospitals realize the cost benefits of mergers quickly, with hospitals largely reporting reduced operating expenses one year after the merger.<sup><a href="#fnxix">xix</a></sup> And the benefits have a lasting impact, with studies finding cost savings still evident four years after consummation of the merger and lower cost growth rates and lower price growth rates at merging hospitals compared to non-merging hospitals over an extended period.<sup><a href="#fnxx">xx</a></sup></p> <p>Unfortunately, consumers do not always benefit when hospitals are able to reduce costs because commercial insurance consolidation has allowed insurers to pocket those savings instead of passing them on to consumers. This was laid bare when the Department of Justice challenged the attempted merger of Cigna with Anthem.</p> <h3>Increased Ability to Make Needed Capital Investments and Effectively Deploy Other Resources</h3> <p>Financially distressed hospitals often cannot effectively recruit clinical staff, upgrade technology or offer specialty services, relative to their financially stable peers. Acquiring-hospitals often provide capital infusions to address these issues, as evidenced by the almost 80% of respondents in one survey who reported significant capital investments in the acquired hospital after the transaction.<sup><a href="#fnxxi">xxi</a></sup> These investments result in improved services.</p> <p>Mergers also can help hospitals “respond to marketplace needs and can help ameliorate resource constraints,” including physical space, capital and personnel.<sup><a href="#fnxxii">xxii</a></sup> With reduced patient volumes and financial difficulties, community hospitals often have excess capacity.<sup><a href="#fnxxiii">xxiii</a></sup> Significant excess capacity can result in higher operating costs per patient, but reduction or elimination of excess capacity may be difficult to achieve absent mergers or consolidation.<sup><a href="#fnxxiv">xxiv</a></sup> When a transaction involves an academic medical center it may be because those organizations often have capacity constraints that can be addressed by a merger with a community hospital.</p> <p>More efficient allocations of resources also facilitate treatment of patients in less costly settings. For example, integration of community hospitals with academic medical centers or hospital systems allows the health system to admit patients to the facility best suited for their needs and decrease costs of care. Patients using the academic medical center for less complex services instead could be treated at the community hospital, easing capacity constraints at the academic medical center, potentially lowering patients’ costs, and often providing a more convenient location for the patients. The academic medical center could then reutilize existing space for the specialist, tertiary and quaternary services not available at community hospitals.</p> <h3>Greater Ability to Participate in Payments Linked to Outcomes</h3> <p>Scale and capital investment also are key conditions that hospitals and health systems must meet in order to take on risk and participate in alternative payment models. Provider payment is moving away from volume-based systems in an effort to focus on patient outcomes while reducing costs. Realigning care around these incentives requires scale in order to take on financial risk. Moreover, these efforts would not be possible without analytics and key investments in health technology. Hospital and health system mergers will help boost participation in these models, which in turn will drive down the cost of care and improve health outcomes.</p> <h3>More Stability and Opportunities for Hospital s Workforce</h3> <p>Hospitals are often anchors for their communities and key economic contributors. Hospitals are jobs creators, and hire employees to serve in many roles, both skilled and unskilled. For example, the Saint Raphael campus added 541 employees following its 2012 merger with Yale New Haven Health. Hospitals are perpetually working to fill clinical positions, including physicians and nurses, where shortages are common and projected to get worse. That was never truer than during the pandemic when skilled nurses treating COVID-19 patients were in short supply and private nursing staffing agencies were charging double and even triple their usual fees to obtain their services.</p> <p>Measuring workers benefits on the basis of salary alone fails to account for benefits that can make hospitals the best places to work in any community. Hospitals and health systems provide many other benefits such as retirement plans, life and other insurance coverage, subsidized child care and tuition reimbursement, to name a few. Mergers and acquisitions can provide new benefits, as well as growth or promotional opportunities. For example, Yale New Haven Health reports that over 1,100 employees of Saint Raphael Hospital were able to take part in career ladders to further advance their careers as a result of their merger in 2012.</p> <h3>Quality Improvements Fueled by Mergers</h3> <p>Mergers can provide community hospitals with the necessary scale to use sophisticated data analytics, identify best practices and implement innovations such as telemedicine. Data-driven development of best practices can reduce the rates of readmission and mortality in merged hospitals.</p> <p>For example, one hospital system in the Northeast was able to better deploy their surgical staff according to expertise and experience following an acquisition, which led to improved health outcomes.<sup><a href="#fnxxv">xxv</a></sup> Statistically significant empirical results include a decrease of 1.1% in the 30-day readmission for heart attacks and a decrease of 1.7% in the mortality rate for pneumonia.<sup><a href="#fnxxvi">xxvi</a></sup> Other quality improvements following a hospital acquisition include increased Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores, reduced readmissions, reduced physician appointment wait times and reduced mortality.<sup><a href="#fnxxvii">xxvii</a></sup></p> <h3>The Pandemic Confirmed the Value of Health Systems’ Integration</h3> <p>The COVID-19 pandemic has highlighted many of the benefits of being part of a health system. Hospitals and health systems were faced with multiple COVID-19 surges that pushed resources to capacity. Integrated health systems were well positioned to deploy their resources to procure equipment in short supply, utilize IT systems to triage equipment and staff, reconfigure space to focus on infected patients and separate them from others, participate in large scale targeted research and perhaps most importantly, redeploy the workforce needed to meet these rapidly changing needs in multiple locations.</p> <p>As COVID-19 case surges occurred throughout the country, health systems with multiple hospitals were able to transfer patients from one facility to another depending on their respective volume levels and available hospital and intensive care unit (ICU) beds. This was especially true for health systems with smaller, rural hospitals that had fewer ICU beds and staff trained to treat infected patients. Having the ability to look across a system and identify where there was available capacity was immensely important to ensuring that patients got needed care and that resources were used efficiently.</p> <p>This wasn’t just limited to transfers of patients. Faced with unprecedented workforce challenges, health system leaders often were able to develop flexible staffing strategies to address patient surges in emergency departments, ICUs, and medical and surgical units. This extended beyond clinical staff. Health systems often were able to redeploy administrative staff to the front lines in roles such as unit clerks and vaccination processing teams.</p> <p>Health systems also were able to deploy their resources and size to quickly mobilize dedicated supply chain teams responsible for tracking down personal protective equipment and other supplies and purchase them in bulk to avoid shortages. Often these efforts were on a global scale, as system staff looked for supply sources outside their typical chains around the world. In some cases, health systems were able to invest directly in domestic manufacturers to actually produce supplies.</p> <p>In addition, health systems often were able to develop in-house testing capabilities, drastically expanding and supplementing often dangerously strained local and state public health efforts. Many systems that established testing sites were later infusion centers and more recently vaccination sites.</p> <p>The ability to harness data and analytics to understand current trends, predict future needs and quite often expand care capacity also was essential during the year. Again, health systems often were able to use their existing data and IT infrastructure to meet these rapidly changing needs.</p> <h2>Conclusion</h2> <p>Some critics are quick to dismiss the benefits of hospital mergers and acquisitions. As a physician with over four decades of experience caring for patients, I can tell you that integration is the key to ensuring every community, whether rural, urban or suburban, has access to the same high standard of affordable, evidenced-based care. The ability of health systems to marshal financial and human resources during the pandemic to save lives and protect communities illustrates vividly their enduring value. And unlike other sectors of health care, communities can be assured that there is vigorous oversight by every level of government to assure those benefits are actually delivered to the patients hospitals and health systems serve. We look forward to discussing with you our shared goal of ensuring that hospitals remain a vital source of care for everyone in their communities, and that they can meet whatever new challenges arise as we work to advance health in America.</p> <hr /> <ol type="i"> <li id="fni"><a href="https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/">https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/</a></li> <li id="fnii"><a href="https://www.aha.org/system/files/2019-01/aha-drug-pricing-study-report-01152019.pdf">https://www.aha.org/system/files/2019-01/aha-drug-pricing-study-report-01152019.pdf</a></li> <li id="fniii"><a href="https://www.modernhealthcare.com/labor/healthcare-providers-face-high-costs-demand-agency-staff-covid-19-rages">https://www.modernhealthcare.com/labor/healthcare-providers-face-high-costs-demand-agency-staff-covid-19-rages</a></li> <li id="fniv"><a href="https://www.reuters.com/article/us-health-coronavirus-usa-nurses/coronavirus-drives-up-demand-and-pay-for-temporary-u-s-nurses-idUSKBN2180HF">https://www.reuters.com/article/us-health-coronavirus-usa-nurses/coronavirus-drives-up-demand-and-pay-for-temporary-u-s-nurses-idUSKBN2180HF</a></li> <li id="fnv"><a href="https://www.aha.org/lettercomment/2021-02-04-aha-urges-ftc-examine-anticompetitive-behavior-nurse-staffing-agencies-and">https://www.aha.org/lettercomment/2021-02-04-aha-urges-ftc-examine-anticompetitive-behavior-nurse-staffing-agencies-and</a></li> <li id="fnvi"><a href="https://www.ama-assn.org/delivering-care/patient-support-advocacy/competition-health-insurance-research">https://www.ama-assn.org/delivering-care/patient-support-advocacy/competition-health-insurance-research</a></li> <li id="fnvii"><a href="https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.0548">https://www.healthaffairs.org/doi/10.1377/hlthaff.2015.0548</a></li> <li id="fnviii"><a href="https://www.aha.org/lettercomment/2021-03-17-aha-urges-doj-investigate-unitedhealth-groups-acquisition-change">https://www.aha.org/lettercomment/2021-03-17-aha-urges-doj-investigate-unitedhealth-groups-acquisition-change</a></li> <li id="fnix"><a href="https://www.bloomberg.com/news/articles/2021-03-05/unitedhealth-s-deal-machine-scoops-up-covid-hit-doctor-groups">https://www.bloomberg.com/news/articles/2021-03-05/unitedhealth-s-deal-machine-scoops-up-covid-hit-doctor-groups</a></li> <li id="fnx">James L. Madara. 2018. Letter to the Honorable Makan Delrahim, Assistant Attorney General, regarding The Acquisition of Aetna, Inc. by CVS Health Corporation.</li> <li id="fnxi"><a href="https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits">https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits</a></li> <li id="fnxii">Schmitt, M.: “Do Hospital Mergers Reduce Costs?” Journal of Health Economics, vol. 52 (2017).</li> <li id="fnxiii">Burke, L., Khullar, D., Zheng, J., Frakt, A., Orav, E., Jha, A.: “Comparison of Costs of Care for Medicare Patients Hospitalized in Teaching and Nonteaching Hospitals.” JAMA Network Open (2019).</li> <li id="fnxiv"><a href="https://www.aha.org/guidesreports/2017-01-24-hospital-merger-benefits-views-hospital-leaders-and-econometric-analysis">https://www.aha.org/guidesreports/2017-01-24-hospital-merger-benefits-views-hospital-leaders-and-econometric-analysis</a></li> <li id="fnxv"><a href="https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits">https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits</a></li> <li id="fnxvi">Schmitt, M.: “Do Hospital Mergers Reduce Costs?” Journal of Health Economics, vol. 52 (2017)</li> <li id="fnxvii"><a href="https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits">https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits</a></li> <li id="fnxviii"><a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf">https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf</a></li> <li id="fnxix"><a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf">https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf</a></li> <li id="fnxx">Margaret E. Guerin-Calvert &amp; Jen A. Maki, FTI Consulting, Hospital Realignment: Mergers Offer Significant Patient and Community Benefits (2014).</li> <li id="fnxxi"><a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf">https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf</a></li> <li id="fnxxii">Margaret E. Guerin-Calvert &amp; Jen A. Maki, FTI Consulting, Hospital Realignment: Mergers Offer Significant Patient and Community Benefits (2014).</li> <li id="fnxxiii"><a href="https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits">https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits</a></li> <li id="fnxxiv">Kathleen Carey, Stochastic Demand for Hospitals and Optimizing “Excess” Bed Capacity, 14 J. Reg. Econ. 165 (1998).</li> <li id="fnxxv">Birkmeyer, John D. 2016. Why health care mergers can be good for patients. NEJM Catalyst. <a href="https://catalyst.nejm.org/why-health-care-mergers-can-be-good-for-patients/">https://catalyst.nejm.org/why-health-care-mergers-can-be-good-for-patients/</a>.</li> <li id="fnxxvi"><a href="https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits">https://www.aha.org/2019-09-04-charles-river-associates-report-hospital-merger-benefits</a></li> <li id="fnxxvii"><a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf">https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf</a></li> </ol> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> <div><a href="/topics/hospital-field-realignment" hreflang="en">Hospital Field Realignment</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/type/testimony" hreflang="en">Testimony</a></div> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_lead"><div class="container"> <div class="row"> <div class="col-md-8"> <center> <p><strong>Testimony of the American Hospital Association for the Subcommittee on Competition Policy, Antitrust, and Consumer Rights of the Committee on the Judiciary of the U.S. Senate “Antitrust Applied: Hospital Consolidation Concerns and Solutions”</strong></p> <p>May 19, 2021</p> <center>&nbsp;</center> </center> </div> <div class="col-md-4"> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="https://www.aha.org/system/files/media/file/2021/05/AHAWrittenTestimonyJudiciaryHearing-051921.pdf" target="_blank" title="Click here to download the PDF of the AHA testimony.">Download the Testimony</a></div> </div> </div> </div> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Not Promoted</div> </div> <h4 class="page-header">Key Resources</h4> <div class="field_related_files file file--mime-application-pdf file--application-pdf"> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/05/AHAWrittenTestimonyJudiciaryHearing-051921.pdf" type="application/pdf; length=694049" title="AHA Testimony on “Antitrust Applied: Hospital Consolidation Concerns and Solutions”">AHA Testimony on “Antitrust Applied: Hospital Consolidation Concerns and Solutions” PDF</a></span> </div> </article> </div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Wed, 19 May 2021 15:53:50 +0000 Matthew Diener 677427 at https://www.aha.org The Value of Hospital Mergers https://www.aha.org/bibliographylink-page/2018-04-20-value-hospital-mergers <span class="title">The Value of Hospital Mergers</span> <span class="uid"><span>Matthew Diener</span></span> <span class="created">May 08, 2021 - 02:21 AM</span> <div class="body"><div class="container row"> <div class="row"> <h1 class="text-align-center"><font color="#4578bd">How Patients Benefit When Hospitals Come Together</font></h1> <hr /></div> </div> <div class="container row"> <div class="row"> <div class="col-md-8"> <p><iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/BOf3X_M4xeg" width="560"></iframe></p> <p>Hospitals and health systems are transforming; redesigning how they deliver care to provide patients and communities with more convenient, cost-effective and innovative services. Mergers and acquisitions are one effective means for developing coordinated systems of care that fuel innovation and drive value-based care. Realignment is a direct response to the changing needs of communities, continuous financial pressures to reduce costs and the ever-present drive to improve quality for patients</p> <p>Hospital mergers open doors to:</p> <ul><li>Advanced Quality</li> <li>Enhanced Services</li> <li>Maintain Access</li> <li>Fuel Innovation</li> </ul><p>Learn more by visiting the resources below.</p> <div class="row" style="margin-top: 30px; margin-bottom: 20px;"> <div class="col-md-6"> <div class="row" style="margin-bottom: 15px;"> <div class="col-md-3"> <div><img src="/sites/default/files/2018-11/Study.png" /></div> </div> <div class="col-md-9"> <h2 style="margin-top:0px; vertical-align: text-bottom;">Studies</h2> </div> </div> <div class="row" style="margin-bottom: 30px;"> <ul><li><a href="/guidesreports/2021-08-16-hospital-merger-benefits-econometric-analysis-revisited">Charles River Associates Report: Hospital Merger Benefits Revisited</a></li> <li><a href="/guidesreports/2021-08-18-hospital-merger-benefits-econometric-analysis-revisited-executive-summary">Executive Summary: Charles River Associates Report: Hospital Merger Benefits Revisited</a></li> <li><a href="/guidesreports/2021-08-16-anticompetitive-conduct-commercial-health-insurance-companies">Anticompetitive Conduct by Commercial Health Insurance Companies</a></li> <li><a href="/position-paper/2021-05-10-examination-new-theories-price-effects-cross-market-hospital-mergers" title="Click here to download this study as a Word document.">An Examination of New Theories on Price Effects of Cross-Market Hospital Mergers</a></li> <li><a href="https://www.ama-assn.org/delivering-care/patient-support-advocacy/competition-health-insurance-research">Competition in Health Insurance, 2019 Update. American Medical Association</a></li> <li><a href="https://www.aha.org/guidesreports/2019-09-04-charles-river-associates-report-hospital-merger-benefits">Charles River Associates Report: Hospital Merger Benefits: Views from Hospital Leaders and Econometric Analysis - An Update</a></li> <li><a href="https://www.aha.org/system/files/2019-02/Cooper-critique_2-14-2019_0.pdf">Comments on “Hospital Prices Grew Substantially Faster Than Physician Prices For Hospital-Based Care In 2007–14"</a></li> <li><a href="/letter/2018-12-14-aha-ftc-approach-reviewing-hospital-transactions-seriously-flawed">AHA: FTC Approach to Reviewing Hospital Transactions Seriously Flawed</a></li> <li><a href="/data-insights/2018-12-14-competition-health-insurance-comprehensive-study-us-markets-2018-update">Competition in Health Insurance: A Comprehensive Study of U.S. Markets, 2018 Update. <em>American Medical Association</em></a></li> <li><a href="/guidesreports/2018-12-14-hospital-merger-benefits-review-and-extension-report-and-executive-summary">Report: Hospital Merger Benefits, a Review and Extension </a></li> <li><a href="/guidesreports/2018-12-12-new-aha-report-building-value-future-through-integration">AHA Report: Building Value for the Future Through Integration</a><br /><em><strong><a href="/guidesreports/2018-12-14-hospital-field-realignment-studies">View additional studies here.</a></strong></em></li> </ul></div> </div> <div class="col-md-6" style="margin-bottom:30px"> <div class="row" style="margin-bottom: 15px; vertical-align: bottom;"> <div class="col-md-3"> <div><img src="/sites/default/files/2018-11/News.png" /></div> </div> <div class="col-md-9"> <h2 style="margin-top:0px; align-self: flex-end;">News Articles</h2> </div> </div> <div class="row"> <ul><li><a href="https://www.beckershospitalreview.com/hospital-transactions-and-valuation/aha-finds-hospital-proximity-matters-in-reaping-merger-benefits.html">Rappleye, E. (2018, Dec 30). AHA finds hospital proximity matters in reaping merger benefits, Beckers Hospital Review.</a></li> <li><a href="https://www.aha.org/news/insights-and-analysis/2018-12-18-kenneth-kaufman-why-hospitals-need-scale?utm_source=newsletter&amp;utm_medium=email&amp;utm_content=12182018%2Dat%2Dpub&amp;utm_campaign=aha%2Dtoday">Kenneth Kaufman: Why hospitals need scale</a></li> <li><a href="https://www.usatoday.com/story/opinion/2017/12/17/health-care-mergers-benefit-patients-editorials-debates/108704794/">Pollack, R. (2018, Dec 17). Health care mergers benefit patients. USA Today.</a></li> <li><a href="/news/headline/2017-10-12-study-positive-outcomes-associated-mergers-and-acquisitions">Study: Positive outcomes associated with mergers and acquisitions</a></li> </ul></div> </div> </div> <div class="row"> <div class="col-md-6" style="margin-bottom:30px"> <div class="row" style="margin-bottom: 15px; vertical-align: bottom;"> <div class="col-md-3"> <div><img src="/sites/default/files/2018-11/Blog.png" /></div> </div> <div class="col-md-9"> <h2 style="margin-top:0px">Blogs</h2> </div> </div> <div class="row" style="margin-bottom: 30px;"> <ul><li><a href="/news/blog/2021-08-16-stat-blog-unitedhealth-group-using-researchers-advance-self-serving-agenda">UnitedHealth Group Using Researchers to Advance Self-Serving Agenda</a></li> <li><a href="/news/perspective/2021-05-21-perspective-integrated-health-systems-help-enhance-value-access">Perspective: Integrated Health Systems Help Enhance Value, Access for Patients and Communities</a></li> <li><a href="https://www.aha.org/news/blog/2021-04-13-aha-rebuttal-employer-consolidation-and-wages-evidence-hospitals">AHA Rebuttal to “Employer Consolidation and Wages: Evidence from Hospitals"</a></li> <li><a href="https://www.aha.org/news/blog/2020-03-02-kaufman-ftc-says-no-social-justice">Kaufman: FTC Says No to Social Justice</a></li> <li><a href="/news/blog/2018-02-14-understanding-hospital-and-health-system-consolidation">Understanding Hospital and Health System Consolidation</a></li> <li><a href="/news/blog/2017-11-08-benefits-hospital-mergers">The Benefits of Hospital Mergers</a></li> </ul></div> </div> <div class="col-md-6" style="margin-bottom:30px"> <div class="row" style="margin-bottom: 15px; vertical-align: bottom;"> <div class="col-md-3"> <div><img src="/sites/default/files/2018-11/Infographic.png" /></div> </div> <div class="col-md-9"> <h2 style="margin-top:0px">Infographic</h2> </div> </div> <div class="row" style="margin-bottom: 30px;"> <ul><li><a href="/infographics/2019-03-19-infographic-value-hospital-mergers">Infographic: The Value of Hospital Mergers</a></li> <li><a href="/infographics/2017-02-01-infographic-coordinating-care">Infographic: Coordinating Care</a></li> </ul></div> </div> </div> <div class="row"> <div class="col-md-6" style="margin-bottom:30px"> <div class="row" style="margin-bottom: 15px; vertical-align: bottom;"> <div class="col-md-3"> <div><img src="/sites/default/files/2019-08/case-study.jpg" /></div> </div> <div class="col-md-9"> <h2 style="margin-top:0px">Case Studies<br />  </h2> </div> </div> <div class="row" style="margin-bottom: 30px;"> <ul><li><a href="/case-studies/2021-06-02-yale-new-haven-hospital-saint-raphael-integration-progress-review">Yale New Haven Hospital Saint Raphael Integration: Progress Review – May 2021</a></li> <li><a href="https://www.aha.org/case-studies/2019-09-12-st-josephs-health-integrates-trinity-health-benefiting-community">St. Joseph's Health – Integration into Trinity Health Four-Year Progress Review – June 2019</a></li> <li><a href="/case-studies/2019-08-21-macneal-hospital-integration-loyola-medicinetrinity-health-one-year">MacNeal Hospital – Integration into Loyola Medicine/Trinity Health One-Year Progress Review – June 2019</a></li> <li><a href="/case-studies/2019-08-14-caldwell-unc-health-care-achieving-value-through-integration">Caldwell UNC Health Care: Achieving Value Through Integration</a></li> <li><a href="/case-studies/2019-08-07-ascension-highlights-how-mergers-acquisitions-helped-it-enhance-quality">Ascension Looks to Mergers and Acquisitions to Positively Impact More Lives, Enhance Quality and Enrich Community Collaboration</a></li> </ul></div> </div> <div class="row"> <div class="col-md-6" style="margin-bottom:30px"> <div class="row" style="margin-bottom: 15px; vertical-align: bottom;"> <div class="col-md-3"> <div><img alt="additional resources image" data-entity-type="file" data-entity-uuid="bfa8a86b-ef3d-481f-936e-ba072fd8f634" src="/sites/default/files/inline-images/resources-icon-147.png" style="vertical-align: text-bottom;" /></div> </div> <div class="col-md-9"> <h2 style="margin-top:0px">Additional Resources</h2> </div> </div> <div class="row" style="margin-bottom: 30px;"> <ul><li><a href="/lettercomment/2021-08-18-aha-letter-white-house-hhs-doj-and-ftc-study-value-hospital-mergers">AHA Letter to White House, HHS, DOJ, and FTC Sharing Charles River Associates Study on the Benefits of Hospital Mergers</a></li> <li><a href="">Letter from AHA to DOJ/FTC and administration</a></li> <li><a href="/testimony/2019-03-07-aha-statement-house-hearing-consolidation">AHA Statement on House Hearing on Consolidation</a></li> <li><a href="https://www.aha.org/system/files/2018-10/181022-aha-grassley-ftc.pdf">AHA Letter to Sen. Grassley on Contracting</a></li> </ul></div> </div> </div> </div> </div> <div class="col-md-4"> <div class="panel module-typeC"> <div class="panel-heading"> <h3 class="text-align-center"><font color="#B20000">Key Resources</font></h3> </div> <div class="panel-body" style="padding-top: 0px;"><a href="/guidesreports/2021-08-16-hospital-merger-benefits-econometric-analysis-revisited"><strong>August 18, 2021</strong> – Charles River Associates Report: Hospital Merger Benefits Revisited</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/guidesreports/2021-08-18-hospital-merger-benefits-econometric-analysis-revisited-executive-summary"><strong>August 18, 2021</strong> – Executive Summary: Charles River Associates Report: Hospital Merger Benefits Revisited</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/guidesreports/2021-08-16-anticompetitive-conduct-commercial-health-insurance-companies"><strong>August 18, 2021</strong> – Anticompetitive Conduct by Commercial Health Insurance Companies</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/lettercomment/2021-08-18-aha-letter-white-house-hhs-doj-and-ftc-study-value-hospital-mergers"><strong>August 18, 2021</strong> – AHA Letter to White House, HHS, DOJ, and FTC Sharing Charles River Associates Study on the Benefits of Hospital Mergers</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/news/headline/2021-05-19-senate-hearing-aha-chair-hochman-highlights-many-ways-hospitals-and-health"><strong>May 19, 2021</strong> – At Senate hearing, AHA Chair Hochman highlights many ways hospitals and health systems benefit patients and communities</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/advisory/2021-05-18-events-week-focused-hospital-mergers-and-financial-health-could-generate-media"><strong>May 18, 2021</strong> – <span style="color: #9df2235; !important">Member Advisory:</span> Events This Week Focused on Hospital Mergers and Financial Health Could Generate Media Attention</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/testimony/2021-05-19-aha-testimony-antitrust-applied-hospital-consolidation-concerns-and-solutions"><strong>May 19, 2021</strong> – AHA Senate Testimony on “Antitrust Applied: Hospital Consolidation Concerns and Solutions”</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/lettercomment/2021-05-18-local-consolidation-oped-sample"><strong>May 18, 2021</strong> – <span style="color: #9df2235; !important">AHA Members Only:</span> Local Consolidation OpEd Sample</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/fact-sheets/2021-05-18-key-messages-consolidation"><strong>May 18, 2021</strong> – <span style="color: #9df2235; !important">AHA Members Only:</span> Key Messages on Consolidation</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/infographics/2021-05-17-infographic-value-health-systems-during-pandemic"><strong>May 17, 2021</strong> – Infographic: Value of Health Systems during the Pandemic</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/system/files/media/file/2021/05/advert-rpollack-WSJ-0521.pdf"><strong>May 17, 2021</strong> – WSJ Advertorial: Value of Health Systems Shown Clearly During the Pandemic</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/system/files/2021-05/AHA_Hospital-Merger-ANR_MN.mp3"><strong>May 17, 2021</strong> – <span style="color: #9df2235; !important">AHA Members Only:</span> Sample Audio News Release on Mergers</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="https://www.aha.org/guidesreports/2019-09-04-charles-river-associates-report-hospital-merger-benefits">Charles River Associates Report: Hospital Merger Benefits: Views from Hospital Leaders and Econometric Analysis - An Update</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="https://www.aha.org/system/files/media/file/2019/09/cra-report-merger-benefits-2019-executive-summary-f.pdf">Executive Summary: Hospital Merger Benefits: Views from Hospital Leaders and Econometric Analysis - An Update</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="https://www.aha.org/system/files/media/file/2019/09/cra-report-advertorial-f.pdf">WSJ Advertorial – Benefits of Mergers</a></div> </div> <div class="panel module-typeC"> <div class="panel-heading"> <h3 class="text-align-center"><font color="#B20000">Related Resources</font></h3> </div> <div class="panel-body" style="padding-top: 0px;"><a href="/guidesreports/2020-02-05-eight-myths-about-hospital-mergers-and-acquisitions">Eight Myths About Hospital Mergers and Acquisitions</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/guidesreports/2020-02-05-comments-changes-quality-care-after-hospital-mergers-and-acquisitions">Comments on Changes in Quality of Care after Hospital Mergers and Acquisitions</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/press-releases/2019-05-09-statement-rand-study-hospital-prices">Statement On Rand Study On Hospital Prices</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/news/blog/2019-04-15-story-health-care-wages-based-study-lacking-necessary-rigor">Story on health care wages based on study lacking necessary rigor</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/news/blog/2018-05-21-price-aint-right-aint-right-again">“The Price Ain’t Right” Ain’t Right Again!</a></div> </div> <div class="panel module-typeC"> <div class="panel-heading"> <h3 class="text-align-center"><font color="#B20000">The Value of Systems During COVID-19</font></h3> </div> <div class="panel-body" style="padding-top: 0px;"><a href="/infographics/2021-07-19-covid-19-response-resilient-integrated-network-protects-patients-employees">Sutter Health COVID-19 Response: Resilient Integrated Network Protects Patients, Employees &amp; Community</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/case-studies/2021-06-01-value-health-systems-during-covid-19-pandemic-spectrum-health-grand-rapids">The Value of Health Systems During the COVID-19 Pandemic Case Study: Spectrum Health – Grand Rapids, Mich.</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/case-studies/2021-06-02-value-health-systems-during-covid-19-pandemic-advocate-aurora-health">The Value of Health Systems During the COVID-19 Pandemic Case Study: Advocate Aurora Health – Milwaukee, Wisc.</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/case-studies/2021-06-02-value-health-systems-during-covid-19-pandemic-ohiohealth-columbus-ohio">The Value of Health Systems During the COVID-19 Pandemic Case Study: OhioHealth – Columbus, Ohio</a></div> <div class="panel-body" style="padding-top: 0px;"><a href="/case-studies/2021-06-02-value-health-systems-during-covid-19-pandemic-scl-health-broomfield">The Value of Health Systems During the COVID-19 Pandemic Case Study: SCL Health – Broomfield, Colorado</a></div> </div> </div> </div> </div> </div> <div class="field_media_featured_image"><article> <div class="field_media_image"> <img src="/sites/default/files/2019-03/AHA_CityScene-Medical.png" width="1500" height="831" alt="City Scene with Medical Facilities" /> </div> </article> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> <div><a href="/topics/hospital-field-realignment" hreflang="en">Hospital Field Realignment</a></div> <div><a href="/topics/care-coordination" hreflang="en">Care Coordination</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/type/bibliographylink-page" hreflang="en">Bibliography/Link Page</a></div> </div> <div class="field_access_level"> <div>Access Level</div> <div><a href="/taxonomy/term/278" hreflang="en">Public</a></div> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_promoted_search_terms"> <div>Promoted Search Terms</div> <div>hospital consolidation, consolidation, hospital, merger, mergers, acquisition, realignment, Care coordination, mergers, coordination, care, hearing</div> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Promoted</div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Sat, 08 May 2021 07:21:37 +0000 Matthew Diener 19623 at https://www.aha.org AHA express concern with FTC approach to N.J. hospital merger https://www.aha.org/news/headline/2021-09-24-aha-express-concern-ftc-approach-nj-hospital-merger <span class="title">AHA express concern with FTC approach to N.J. hospital merger</span> <span class="uid"><span>tjordan_drupal</span></span> <span class="created">Sep 24, 2021</span> <div class="field_media_featured_image"><article> <div class="field_media_image"> <img src="/sites/default/files/styles/900x400/public/2019-04/AHA-amicus-brief.jpg?itok=rvwWkQkI" width="900" height="400" alt="AHA amicus brief" /> </div> </article> </div> <div class="body"><p>AHA, joined by the Association of American Medical Colleges, this week filed an <a href="https://www.aha.org/amicus-brief/2021-09-22-aha-aamc-amicus-brief-federal-trade-commission-vs-hackensack-meridian">amicus brief</a>&nbsp;in response to the Federal Trade Commission’s challenge to a hospital merger in New Jersey in the U.S. Court of Appeals for the 3rd Circuit. In the brief, the associations expressed concerns about the FTC’s approach to defining the geographic market definition and its apparent disregard for its own merger guidelines in the case.&nbsp;</p> <p>“[I]t is essential that the FTC use, and the courts apply, market definition tests that track the law, well-settled economic principles, and the business realities of the healthcare sector,” the brief states. “Moreover, notwithstanding the FTC’s surprising statements to the contrary, it is important that FTC investigations and litigation positions not disregard the Department of Justice’s and Federal Trade Commission’s Horizontal Merger Guidelines when defining relevant markets.”<br /> &nbsp;<br /> The New Jersey Hospital Association also filed an <a href="https://www.aha.org/amicus-brief/2021-09-22-amicus-brief-nj-hospital-association-re-federal-trade-commission-v">amicus brief</a>&nbsp;in the case that focused on two issues, which the association contends were not properly considered by the FTC and the district court: New Jersey’s robust regulatory framework for evaluating nonprofit hospital transactions that resulted in approvals of the merger; and important public policy benefits of hospital mergers that result in strong hospitals and health systems available to provide high quality services to New Jersey’s patients and communities.<br /> &nbsp;</p> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> </div> <div class="field_type">Headline</div> Fri, 24 Sep 2021 19:48:56 +0000 tjordan_drupal 679709 at https://www.aha.org NJ Hospital Assoc. Amicus Brief: FTC v. Hackensack Meridian Health, Inc. and Englewood Healthcare Foundation https://www.aha.org/amicus-brief/2021-09-22-amicus-brief-nj-hospital-association-re-federal-trade-commission-v <span class="title">NJ Hospital Assoc. Amicus Brief: FTC v. Hackensack Meridian Health, Inc. and Englewood Healthcare Foundation</span> <span class="uid"><span>dsamuels_drupal</span></span> <span class="created">Sep 22, 2021 - 12:40 PM</span> <div class="body"><h2><b><span style="font-size:24.0pt"><span style="font-family:&quot;Helvetica&quot;,sans-serif"><span style="color:#333333">Statement of Identification and Interest</span></span></span></b></h2> <p>Since 1918, the New Jersey Hospital Association (“NJHA”) has actively worked with its nearly 400 member healthcare organizations, including all 71 New Jersey acute care hospitals, to help them provide accessible, affordable and quality healthcare to New Jersey communities and patients. NJHA accomplishes its mission by providing leadership in policy and data analysis, education, community outreach, and by serving as an advocate to elected officials and tribunals at the state and federal levels on behalf of New Jersey’s acute care hospitals. NJHA also participates in the development of New Jersey policy at the legislative, agency and judicial levels and recommends improvements to enhance the quality, safety, and value of healthcare provided to patients throughout New Jersey.</p> <p>Given NJHA’s mission to safeguard and improve patients’ access to quality and affordable healthcare, the NJHA has an interest in supporting hospital transactions that benefit New Jersey’s patients and communities, as determined by New Jersey’s extensive regulatory evaluation process. These state regulatory processes invite participation from all stakeholders in the New Jersey healthcare market, including the public, and represent a robust and independent evaluation of potential healthcare transactions by those agencies that are in the best position to know. In the instant case, the District Court’s issuance of a preliminary injunction preventing the proposed transaction between Hackensack Meridian Health, Inc. and Englewood Healthcare Foundation failed to give due weight to these critical state regulatory evaluation processes. Accordingly, amicus curiae NJHA respectfully submits this brief by motion pursuant to Rule 29(a) of the Federal Rules of Appellate Procedure in support of Appellants’ position that the District Court’s judgment failed to take into account several critical considerations.</p> <p>View the entire Amicus Brief below.&nbsp;</p> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> <div><a href="/topics/marketplace-issuesstability" hreflang="en">Marketplace Issues/Stability</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/type/amicus-brief" hreflang="en">Amicus Brief</a></div> </div> <div class="field_access_level"> <div>Access Level</div> <div><a href="/taxonomy/term/278" hreflang="en">Public</a></div> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_lead"><p>New Jersey Hospital Association Amicus Brief:&nbsp;Federal Trade Commission v. Hackensack Meridian Health, Inc. and Englewood Healthcare Foundation</p> <p>September 22, 2021</p> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Not Promoted</div> </div> <h4 class="page-header">Key Resources</h4> <div class="field_related_files file file--mime-application-pdf file--application-pdf"> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/09/amicus-brief-nj-hospital-association-re-federal-trade-commission-v-hackensack-meridian-health-inc-and-englewood-healthcare-foundation-9-22-21.pdf" type="application/pdf; length=2691448" title="Amicus Brief: NJ Hospital Association Re: Federal Trade Commission V. Hackensack Meridian Health, Inc. and Englewood Healthcare Foundation">Amicus Brief: NJ Hospital Association Re: Federal Trade Commission V. Hackensack Meridian Health, Inc. and Englewood Healthcare </a></span> </div> </article> </div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Wed, 22 Sep 2021 17:40:32 +0000 dsamuels_drupal 679701 at https://www.aha.org AHA, AAMC Amicus Brief: Federal Trade Commission vs Hackensack Meridian Health, Inc, Et Al https://www.aha.org/amicus-brief/2021-09-22-aha-aamc-amicus-brief-federal-trade-commission-vs-hackensack-meridian <span class="title">AHA, AAMC Amicus Brief: Federal Trade Commission vs Hackensack Meridian Health, Inc, Et Al</span> <span class="uid"><span>dsamuels_drupal</span></span> <span class="created">Sep 22, 2021 - 10:46 AM</span> <div class="body"><h2>INTRODUCTION</h2> <p>The FTC’s approach to defining the relevant geographic market in this case conflicts with settled law and economic principles, as well as business reality. In-deed, the FTC is attempting to do something that it has never directly attempted in hospital merger litigation—define a relevant geographic market based on where “commercially insured patients” live—“in Bergen County.” Op. 44.2 Because the FTC’s testifying expert defined a market of patients who live in Bergen County, settled antitrust law required the agency to show that the parties could “price dis-criminate” with respect to those patients—i.e., charge one (presumably higher) price to insurers for their members who reside in Bergen County and different (presumably lower) prices to their members who reside outside Bergen County. It is undisputed that the FTC never even attempted to carry that burden. That failure alone warrants reversal.</p> <p>Even if the FTC had tried to make this unprecedented showing, however, it would have failed. It is not feasible for hospitals to charge patients different prices based on where they live, and it would make no real-world sense to even try. As one leading treatise explains, “[t]he contracts that hospitals negotiate with third-party payors constrain them to charge each payor’s patients the same set of prices, regardless of where the patients live or which company the patient works for.” Thomas McCarthy &amp; Scott Thomas, Geographic Market Issues in Hospital Mergers, in ABA ANTITRUST SECTION, HEALTH CARE MERGERS AND ACQUISITIONS HAND-BOOK 50 (2003). And even if it were feasible for a hospital to charge different pa-tients (or their insurers) different prices based on where the patients live, any hospital that attempted such “redlining” in its pricing would likely be rebuked, swiftly and severely, by government regulators. Put simply, the price discrimination on which the FTC’s market definition rests is both practically and legally infeasible. Thus, the district court’s acceptance of the FTC’s relevant geographic market was legal error that compels reversal. <em>See FTC v. Penn State Hershey Med. Ctr.,</em> 838 F.3d 327, 336–37 (3d Cir. 2016).</p> <p>The FTC, of course, was (and is) well aware that it failed to carry its burden of proving a geographic market based on customer location. In the hope of avoiding this problem, the FTC’s testifying economist purported to validate her patient-based geographic market by running market definition tests for two different relevant geo-graphic markets. But this fallback effort was likewise deficient as a matter of law: it utilized and depended on the outputs of a model reported in an academic paper that analyzed hospital mergers that did not occur in New Jersey, much less in Bergen County. Tr. 961:11–20; Christopher Garmon, The Accuracy of Hospital Merger Screening Methods, 48 RAND J. ECON. 1068, 1080 (2017). Hospitals operate in local markets with varying supply and demand conditions, and under settled Third Circuit precedent, geographic markets are “[d]etermined within the specific context of each case” and “must correspond to the commercial realities of the industry being considered.” Penn State Hershey Med. Ctr., 838 F.3d at 338 (internal quotation marks and citation omitted).</p> <p>If the Court were to endorse the FTC’s novel approach to market definition, its decision would open the floodgates to the FTC litigating (and threatening to litigate) hospital merger challenges based on artificially narrow markets that are unrelated to how hospitals actually negotiate prices with insurance companies. This in&nbsp;turn would allow the FTC to challenge transactions that pose no threat to competition, while making it harder for hospitals to allocate capital to procompetitive transactions—a result squarely at odds with the purpose of the antitrust laws.</p> <p>View the entire amicus brief below&nbsp;</p> <p>&nbsp;</p> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> <div><a href="/topics/marketplace-issuesstability" hreflang="en">Marketplace Issues/Stability</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/type/amicus-brief" hreflang="en">Amicus Brief</a></div> </div> <div class="field_access_level"> <div>Access Level</div> <div><a href="/taxonomy/term/278" hreflang="en">Public</a></div> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_lead"><p>September 22, 2021</p> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Not Promoted</div> </div> <h4 class="page-header">Key Resources</h4> <div class="field_related_files file file--mime-application-pdf file--application-pdf"> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/09/amicus-brief-aha-aamc-federal-trade-commission-vs-hackensack-meridian-health-in-et-al-9-22-21.pdf" type="application/pdf; length=414047" title="AHA, AAMC Amicus Brief: Federal Trade Commission vs Hackensack Meridian Health, Inc, Et Al">AHA, AAMC Amicus Brief: Federal Trade Commission vs Hackensack Meridian Health, Inc, Et Al</a></span> </div> </article> </div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Wed, 22 Sep 2021 15:46:19 +0000 dsamuels_drupal 679638 at https://www.aha.org Study: Rural hospital mergers linked to better patient outcomes https://www.aha.org/news/headline/2021-09-21-study-rural-hospital-mergers-linked-better-patient-outcomes <span class="title">Study: Rural hospital mergers linked to better patient outcomes</span> <span class="uid"><span>tjordan_drupal</span></span> <span class="created">Sep 21, 2021</span> <div class="field_media_featured_image"><article> <div class="field_media_image"> <img src="/sites/default/files/styles/900x400/public/2018-04/rural%20hospital%20comment.jpg?itok=IiccVafz" width="900" height="400" alt="rural hospital comment" /> </div> </article> </div> <div class="body"><p>In a <a href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2784342">study</a>&nbsp;reported this week in JAMA Network Open, rural hospital mergers were associated with lower mortality for patients admitted to the hospital for heart attack, heart failure, stroke and pneumonia. The authors said the finding “is important to enhancing rural health care and reducing urban-rural disparities in quality of care.”</p> </div> <div class="field_topics"> <div><a href="/topics/rural-issues" class="topic" hreflang="en">Rural issues</a></div> <div><a href="/topics/mergers-acquisitions" hreflang="en">Mergers &amp; Acquisitions</a></div> </div> <div class="field_type">Headline</div> Tue, 21 Sep 2021 18:16:37 +0000 tjordan_drupal 679631 at https://www.aha.org AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers https://www.aha.org/lettercomment/2021-08-18-aha-letter-white-house-hhs-doj-and-ftc-study-value-hospital-mergers <span class="title">AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers</span> <span class="uid"><span>Matthew Diener</span></span> <span class="created">Aug 18, 2021 - 07:00 AM</span> <div class="body"><div class="container"> <div class="row"> <div class="col-md-8"> <p>August 18, 2021</p> <div class="row"> <div class="col-md-6"> <p>Tim Wu<br /> National Economic Council, Room 235<br /> Eisenhower Executive Office Building<br /> Washington, DC 20502</p> <p>The Honorable Xavier Becerra<br /> U.S. Department of Health and Human Services<br /> 200 Independence Avenue, SW<br /> Washington, DC 20201</p> </div> <div class="col-md-6"> <p>The Honorable Lina Khan<br /> Federal Trade Commission<br /> 600 Pennsylvania Avenue, NW<br /> Washington, DC 20580</p> <p>The Honorable Richard Powers<br /> Antitrust Division<br /> U.S. Department of Justice<br /> 950 Pennsylvania Ave, NW<br /> Washington, DC 20530</p> </div> </div> <p>Dear Secretary Becerra, Chairwoman Khan, Mr. Powers and Mr. Wu,</p> <p>President Biden’s Executive Order on <em>Promoting Competition in the American Economy</em> called upon all agencies of the federal government to protect and promote fair competition throughout the economy. Achieving that objective will require each agency to assess fairly the activities of those fields and industries that fall within its purview.</p> <p>To that end, the American Hospital Association, which represents nearly 5,000 hospitals, health care systems networks and other providers of care and 43,000 individual members, is providing each of your agencies with an updated study on the benefits of mergers within the hospital field. Additionally, we are providing an updated assessment of problematic conduct by the commercial health insurance industry that appears to have skirted much of the antitrust enforcement and regulatory attention provided by this assemblage of federal agencies.</p> <p>Despite the recent unfortunate remarks by the Federal Trade Commission’s (FTC) Director of Public Affairs,<sup><a href="#fn1">1</a></sup> we continue to believe that all pertinent federal agencies will do their best to assess both proposed mergers in the hospital field and the resulting impacts on the communities they serve. The fact is that most proposed hospital mergers present no competitive issues and offer real benefits for those communities.<sup><a href="#fn2">2</a></sup></p> <p>The most recent study of those benefits is by Charles River Associates (CRA),<sup><a href="#fn3">3</a>,</sup> which is attached, and confirms that contemporary hospital mergers result in significant cost savings and quality improvements without an increase in revenue consistent with the acquisition of market power. CRA concludes that these findings suggest that cost savings resulting from hospital mergers <em>are</em> passed on to commercial health insurance plans. Whether those savings are passed on to consumers is uncertain at best.</p> <p>The benefits of the integrated health systems that often result from mergers have been particularly pronounced during the recent and ongoing pandemic, especially for hospitals in rural areas. Even before the pandemic began, “about one in five hospital partnership transactions involved a financially distressed hospital, many at risk of imminent closure.”<sup><a href="#fn4">4</a></sup> Nineteen rural hospitals closed their doors last year, but many more might have closed had they not been able to draw on the resources provided by an integrated health system.</p> <p>While hospital mergers and conduct have received generous amounts of attention from both federal antitrust agencies, that has not so clearly been the case for the commercial health insurance industry. The attached paper highlights that industry’s proclivity for anticompetitive conduct and some of the recent practices that, while detrimental for both consumers and providers, seems to have escaped scrutiny from any responsible federal agency.<sup><a href="#fn5">5</a></sup></p> <p>We would like to meet with each of you to discuss these papers and share our views about the benefits hospital mergers can have for communities, particularly those hit hard by the ongoing pandemic, as well as the conduct of the commercial health insurance industry and its impact on consumers and providers.</p> <p>Sincerely,</p> <p>/s/</p> <p>Richard J. Pollack<br /> President and Chief Executive Officer</p> <p>Attachments:</p> <p>Charles River Associates, <a href="/guidesreports/2021-08-16-hospital-merger-benefits-econometric-analysis-revisited">Hospital Merger Benefits: An Econometric Analysis Revisited</a>, August 2021 (<a href="/guidesreports/2021-08-16-hospital-merger-benefits-econometric-analysis-revisited">Full Paper</a> and <a href="/guidesreports/2021-08-18-hospital-merger-benefits-econometric-analysis-revisited-executive-summary">Executive Summary</a>).</p> <p><a href="/guidesreports/2021-08-16-anticompetitive-conduct-commercial-health-insurance-companies">Anticompetitive Conduct by Commercial Insurance Companies, Scrutiny Needed to Prevent Adverse Impacts on Consumers and Providers</a>, American Hospital Association, August 2021.</p> <hr /> <ol> <li id="fn1"><a href="Z" target="_blank">https://www.ftc.gov/news-events/press-releases/2021/08/statement-ftc-office-public-affairs-director-lindsay-kryzak</a>. From President Biden’s inaugural address: “Every disagreement doesn’t have to be a cause for total war….[w]e must end this uncivil war.” <em>Unity and Civility in America</em> <a href="https://thehill.com/opinion/white-house/535296-unity-and-civility-in-america" target="_blank">https://thehill.com/opinion/white-house/535296-unity-and-civility-in-america</a></li> <li id="fn2">“The [hospital] industry is less concentrated than other sectors like airlines,” according to Debbie Feinstein, former director of the FTC’s Bureau of Competition. “If hospital prices are increasing, consolidation isn’t necessarily to blame,” she said. <a href="https://news.bloomberglaw.com/health-law-and-business/keeping-hospital-market-competitive-is-an-uphill-battle-for-ftc" target="_blank">https://news.bloomberglaw.com/health-law-and-business/keeping-hospital-market-competitive-is-an-uphill-battle-for-ftc</a>, June 6, 2019</li> <li id="fn3">CRA is the same economics consulting firm employed by the current and the immediate past California Attorney General to perform antitrust analyses in connection with various hospital mergers and markets. E.g., <a href="https://www.aha.org/2021-05-28-amicus-brief-pasadena-hospital-assn-ltd-dba-huntington-hospital-and-cedars-sinai-health" target="_blank">https://www.aha.org/2021-05-28-amicus-brief-pasadena-hospital-assn-ltd-dba-huntington-hospital-and-cedars-sinai-health</a>.</li> <li id="fn4"><a href="https://www.fiercehealthcare.com/hospitals/industry-voices-a-time-need-hospitals-must-be-able-to-transform" target="_blank">https://www.fiercehealthcare.com/hospitals/industry-voices-a-time-need-hospitals-must-be-able-to-transform</a></li> <li id="fn5">Letter from Senators Leahy and Daines to Attorney General Garland and Lina Khan, FTC Chair requesting information about the federal antitrust agencies’ enforcement activities against the commercial insurance industry. July 20, 2021.</li> </ol> </div> <div class="col-md-4"> <center> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/lettercomment/2021-08-18-aha-letter-white-house-hhs-doj-and-ftc-study-value-hospital-mergers" target="_blank">Download the Letter PDF</a></div> </center> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/bibliographylink-page/2018-04-20-value-hospital-mergers" target="_blank">View More AHA Resources on the Value of Hospital Mergers</a></div> </div> </div> </div> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/taxonomy/term/113" hreflang="en">Letter/Comment</a></div> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Not Promoted</div> </div> <h4 class="page-header">Key Resources</h4> <div class="field_related_files file file--mime-application-pdf file--application-pdf"> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/08/AHALetterOnly_CRAStudy_WH_HHS_DOJ_FTC_081821web.pdf" type="application/pdf; length=394024" title="AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers">AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers PDF</a></span> </div> </article> </div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Wed, 18 Aug 2021 12:00:00 +0000 Matthew Diener 679065 at https://www.aha.org AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers with Attachments https://www.aha.org/lettercomment/2021-08-18-aha-letter-white-house-hhs-doj-and-ftc-study-value-hospital-mergers-0 <span class="title">AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers with Attachments</span> <span class="uid"><span>Matthew Diener</span></span> <span class="created">Aug 18, 2021 - 06:00 AM</span> <div class="body"><div class="container"> <div class="row"> <div class="col-md-8"> <p>August 18, 2021</p> <div class="row"> <div class="col-md-6"> <p>Tim Wu<br /> National Economic Council, Room 235<br /> Eisenhower Executive Office Building<br /> Washington, DC 20502</p> <p>The Honorable Xavier Becerra<br /> U.S. Department of Health and Human Services<br /> 200 Independence Avenue, SW<br /> Washington, DC 20201</p> </div> <div class="col-md-6"> <p>The Honorable Lina Khan<br /> Federal Trade Commission<br /> 600 Pennsylvania Avenue, NW<br /> Washington, DC 20580</p> <p>The Honorable Richard Powers<br /> Antitrust Division<br /> U.S. Department of Justice<br /> 950 Pennsylvania Ave, NW<br /> Washington, DC 20530</p> </div> </div> <p>Dear Secretary Becerra, Chairwoman Khan, Mr. Powers and Mr. Wu,</p> <p>President Biden’s Executive Order on <em>Promoting Competition in the American Economy</em> called upon all agencies of the federal government to protect and promote fair competition throughout the economy. Achieving that objective will require each agency to assess fairly the activities of those fields and industries that fall within its purview.</p> <p>To that end, the American Hospital Association, which represents nearly 5,000 hospitals, health care systems networks and other providers of care and 43,000 individual members, is providing each of your agencies with an updated study on the benefits of mergers within the hospital field. Additionally, we are providing an updated assessment of problematic conduct by the commercial health insurance industry that appears to have skirted much of the antitrust enforcement and regulatory attention provided by this assemblage of federal agencies.</p> <p>Despite the recent unfortunate remarks by the Federal Trade Commission’s (FTC) Director of Public Affairs,<sup><a href="#fn1">1</a></sup> we continue to believe that all pertinent federal agencies will do their best to assess both proposed mergers in the hospital field and the resulting impacts on the communities they serve. The fact is that most proposed hospital mergers present no competitive issues and offer real benefits for those communities.<sup><a href="#fn2">2</a></sup></p> <p>The most recent study of those benefits is by Charles River Associates (CRA),<sup><a href="#fn3">3</a>,</sup> which is attached, and confirms that contemporary hospital mergers result in significant cost savings and quality improvements without an increase in revenue consistent with the acquisition of market power. CRA concludes that these findings suggest that cost savings resulting from hospital mergers <em>are</em> passed on to commercial health insurance plans. Whether those savings are passed on to consumers is uncertain at best.</p> <p>The benefits of the integrated health systems that often result from mergers have been particularly pronounced during the recent and ongoing pandemic, especially for hospitals in rural areas. Even before the pandemic began, “about one in five hospital partnership transactions involved a financially distressed hospital, many at risk of imminent closure.”<sup><a href="#fn4">4</a></sup> Nineteen rural hospitals closed their doors last year, but many more might have closed had they not been able to draw on the resources provided by an integrated health system.</p> <p>While hospital mergers and conduct have received generous amounts of attention from both federal antitrust agencies, that has not so clearly been the case for the commercial health insurance industry. The attached paper highlights that industry’s proclivity for anticompetitive conduct and some of the recent practices that, while detrimental for both consumers and providers, seems to have escaped scrutiny from any responsible federal agency.<sup><a href="#fn5">5</a></sup></p> <p>We would like to meet with each of you to discuss these papers and share our views about the benefits hospital mergers can have for communities, particularly those hit hard by the ongoing pandemic, as well as the conduct of the commercial health insurance industry and its impact on consumers and providers.</p> <p>Sincerely,</p> <p>/s/</p> <p>Richard J. Pollack<br /> President and Chief Executive Officer</p> <p>Attachments:</p> <p>Charles River Associates, <a href="/guidesreports/2021-08-16-hospital-merger-benefits-econometric-analysis-revisited">Hospital Merger Benefits: An Econometric Analysis Revisited</a>, August 2021 (<a href="/guidesreports/2021-08-16-hospital-merger-benefits-econometric-analysis-revisited">Full Paper</a> and <a href="/guidesreports/2021-08-18-hospital-merger-benefits-econometric-analysis-revisited-executive-summary">Executive Summary</a>).</p> <p><a href="/guidesreports/2021-08-16-anticompetitive-conduct-commercial-health-insurance-companies">Anticompetitive Conduct by Commercial Insurance Companies, Scrutiny Needed to Prevent Adverse Impacts on Consumers and Providers</a>, American Hospital Association, August 2021.</p> <hr /> <ol> <li id="fn1"><a href="Z" target="_blank">https://www.ftc.gov/news-events/press-releases/2021/08/statement-ftc-office-public-affairs-director-lindsay-kryzak</a>. From President Biden’s inaugural address: “Every disagreement doesn’t have to be a cause for total war….[w]e must end this uncivil war.” <em>Unity and Civility in America</em> <a href="https://thehill.com/opinion/white-house/535296-unity-and-civility-in-america" target="_blank">https://thehill.com/opinion/white-house/535296-unity-and-civility-in-america</a></li> <li id="fn2">“The [hospital] industry is less concentrated than other sectors like airlines,” according to Debbie Feinstein, former director of the FTC’s Bureau of Competition. “If hospital prices are increasing, consolidation isn’t necessarily to blame,” she said. <a href="https://news.bloomberglaw.com/health-law-and-business/keeping-hospital-market-competitive-is-an-uphill-battle-for-ftc" target="_blank">https://news.bloomberglaw.com/health-law-and-business/keeping-hospital-market-competitive-is-an-uphill-battle-for-ftc</a>, June 6, 2019</li> <li id="fn3">CRA is the same economics consulting firm employed by the current and the immediate past California Attorney General to perform antitrust analyses in connection with various hospital mergers and markets. E.g., <a href="https://www.aha.org/2021-05-28-amicus-brief-pasadena-hospital-assn-ltd-dba-huntington-hospital-and-cedars-sinai-health" target="_blank">https://www.aha.org/2021-05-28-amicus-brief-pasadena-hospital-assn-ltd-dba-huntington-hospital-and-cedars-sinai-health</a>.</li> <li id="fn4"><a href="https://www.fiercehealthcare.com/hospitals/industry-voices-a-time-need-hospitals-must-be-able-to-transform" target="_blank">https://www.fiercehealthcare.com/hospitals/industry-voices-a-time-need-hospitals-must-be-able-to-transform</a></li> <li id="fn5">Letter from Senators Leahy and Daines to Attorney General Garland and Lina Khan, FTC Chair requesting information about the federal antitrust agencies’ enforcement activities against the commercial insurance industry. July 20, 2021.</li> </ol> </div> <div class="col-md-4"> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/system/files/media/file/2021/08/AHALetter-CRAStudy-toWH-HHS-DOJ-FTC-web.pdf" target="_blank">Download the Letter with Attachments PDF</a></div> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/bibliographylink-page/2018-04-20-value-hospital-mergers" target="_blank">View More AHA Resources on the Value of Hospital Mergers</a></div> </div> </div> </div> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/taxonomy/term/113" hreflang="en">Letter/Comment</a></div> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Not Promoted</div> </div> <h4 class="page-header">Key Resources</h4> <div class="field_related_files file file--mime-application-pdf file--application-pdf"> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/08/AHALetter-CRAStudy-toWH-HHS-DOJ-FTC-web.pdf" type="application/pdf; length=647177" title="AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers with Attachments">AHA Letter to White House, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers with Attachments PDF</a></span> </div> </article> </div> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/08/cra-merger-benefits-revisited-0821.pdf" type="application/pdf; length=190576" title="Hospital Merger Benefits: An Econometric Analysis Revisited">Hospital Merger Benefits: An Econometric Analysis Revisited PDF</a></span> </div> </article> </div> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/08/cra-merger-benefits-revisited-executivesummary-0821.pdf" type="application/pdf; length=126590" title="Hospital Merger Benefits: An Econometric Analysis Revisited Executive Summary">Hospital Merger Benefits: An Econometric Analysis Revisited Executive Summary PDF</a></span> </div> </article> </div> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/08/anticompetitive-conduct-commerical-health-insurers-0821.pdf" type="application/pdf; length=82199" title="Anticompetitive Conduct by Commercial Health Insurance Companies">Anticompetitive Conduct by Commercial Health Insurance Companies PDF</a></span> </div> </article> </div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Wed, 18 Aug 2021 11:00:00 +0000 Matthew Diener 679066 at https://www.aha.org Hospital Merger Benefits: An Econometric Analysis Revisited Executive Summary https://www.aha.org/guidesreports/2021-08-18-hospital-merger-benefits-econometric-analysis-revisited-executive-summary <span class="title">Hospital Merger Benefits: An Econometric Analysis Revisited Executive Summary</span> <span class="uid"><span>Matthew Diener</span></span> <span class="created">Aug 18, 2021 - 06:00 AM</span> <div class="body"><div class="container"> <div class="row"> <div class="col-md-8"> <p>This is the third analysis by Charles River Associates (CRA) showing that recent hospital acquisitions reduce costs and lead to improved performance on important quality indicators without an increase in revenue that may signal enhanced market power. CRA’s previous research, released in 2017 and 2019, analyzed the effects of hospital acquisitions on hospitals’ costs and several indicators of quality of care following probative interviews with hospital leaders. All three analyses found that hospital acquisitions can generate substantial benefits.</p> <div class="row"> <div class="col-md-8"> <p>This new analysis revisits the previous econometric analyses and includes two additional years of data for 2018 and 2019 on cost, quality and revenue outcomes from hospital transactions. The addition of these data allowed CRA to measure the effects of 144 additional hospital acquisitions and also to measure the effects of the hospital acquisitions previously included in the studies over a longer period of time. In total, this most recent analysis expands the data to include approximately 6,000 additional hospital-year observations. Using these new data, the updated results reinforce the conclusions of previous reports: hospital acquisitions benefit patients by providing access to higher-quality care at a lower cost.</p> <ul> <li>Updated results indicate that acquisitions were associated with a statistically significant 3.3 percent reduction in annual operating expense per adjusted admission at the acquired hospitals. These estimates are larger in magnitude than previous estimates and provide additional evidence that the reductions in operating expenses at acquired hospitals are long-term rather than transitory.</li> <li>At the same time, hospital acquistions lead to improvements on key indicators of quality. Empirical analysis continues to show a statistically significant reduction in inpatient readmission rates and a composite readmission/mortality outcome measure.</li> <li>Revenue per admission at acquired hospitals also declines relative to non-merging hospitals by a statistically significant 3.7 percent. These results suggest that savings that accrue to merging hospitals are passed on to health plans.</li> </ul> </div> <div class="col-md-4"> <blockquote> <h3>New data reinforce conclusion that hospital acquistions benefit patients by providing access to higher-quality care at a lower cost.</h3> </blockquote> </div> </div> <p><strong><a href="/guidesreports/2021-08-16-hospital-merger-benefits-econometric-analysis-revisited">Read full report - Hospital Merger Benefits: An Econometric Analysis Revisited</a></strong></p> <p>These results demonstrate that the potential benefits identified by hospital leaders are evident in the actual effects of hospital acquisitions on hospitals’ costs, revenues and mortality and readmission quality indicators. Changes in the operating expenses per adjusted admission of acquired hospitals were lower than those of comparable nonacquired hospitals and these decreases in expenses were accompanied by commensurate declines in revenue per adjusted admission.</p> <p>Finally, the additional data used in this update allow for several extensions of the original analyses and follow the approaches used in peer-reviewed studies of hospital acquisitions. The results of these extensions are consistent with the original analysis and provide support for the primary results.</p> <hr /> <p><em>The authors are economists at Charles River Associates (CRA). CRA consultants are experts in the area of hospital antitrust analysis and health care policy, having been retained by federal and state agencies and hospital systems to evaluate the effects of hospital transacitons.</em></p> <p><em>The conclusions set forth herein are based on independent research and publicly available material. The views expressed herein are the views and opinions of the authors and do not reflect or represent the views of Charles River Associates or any organizations with which the authors are affiliated. Financial support was provided by the American Hospital Association.</em></p> </div> <div class="col-md-4"> <center> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="https://www.aha.org/system/files/media/file/2021/08/cra-merger-benefits-revisited-0821.pdf" title="Click here to download the PDF of the full Charles River Associates study on the benefits of hospital mergers." target="_blank">Download the Full Report PDF</a></div> </center> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/lettercomment/2021-08-18-aha-letter-white-house-hhs-doj-and-ftc-study-value-hospital-mergers" title="Click here to view the Letter that the AHA sent to National Economic Council, HHS, DOJ, and FTC on the findings of this study." target="_blank">Read the AHA Letter to the National Economic Council, HHS, DOJ, and FTC on Study of Benefits of Hospital Mergers</a></div> <div class="external-link spacer"><a class="btn btn-wide btn-primary" href="/bibliographylink-page/2018-04-20-value-hospital-mergers" title="Click here to view AHA resources on the value of hospital mergers." target="_blank">View More AHA Resources on the Value of Hospital Mergers</a></div> </div> </div> </div> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/taxonomy/term/127" hreflang="en">Guides/Reports</a></div> </div> <div class="field_author"> <span><a href="/node/679044" hreflang="en">Sean May</a></span>, <span><a href="/node/679045" hreflang="en">Monica Noether</a></span>, <span><a href="/node/679046" hreflang="en">Ben Stearns</a></span> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_lead"><div class="container"> <div class="row"> <div class="col-md-8"> <p>Acquisitions benefit patients with higher-quality care at a lower cost</p> </div> <div class="col-md-4"> <div><a class="btn btn-wide btn-primary" href="/system/files/media/file/2021/08/cra-merger-benefits-revisited-executivesummary-0821.pdf" target="_blank">Download the Executive Summary PDF</a></div> </div> </div> </div> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Not Promoted</div> </div> <h4 class="page-header">Key Resources</h4> <div class="field_related_files file file--mime-application-pdf file--application-pdf"> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/08/cra-merger-benefits-revisited-executivesummary-0821.pdf" type="application/pdf; length=126590" title="Hospital Merger Benefits: An Econometric Analysis Revisited Executive Summary">Hospital Merger Benefits: An Econometric Analysis Revisited Executive Summary PDF</a></span> </div> </article> </div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Wed, 18 Aug 2021 11:00:00 +0000 Matthew Diener 679057 at https://www.aha.org Anticompetitive Conduct by Commercial Health Insurance Companies https://www.aha.org/guidesreports/2021-08-16-anticompetitive-conduct-commercial-health-insurance-companies <span class="title">Anticompetitive Conduct by Commercial Health Insurance Companies</span> <span class="uid"><span>Matthew Diener</span></span> <span class="created">Aug 18, 2021 - 06:00 AM</span> <div class="body"><p>For decades, the commercial health insurance industry has largely escaped close scrutiny for conduct and practices that adversely impact both consumers and providers. Passage of the Affordable Care Act (ACA) and, most recently, the repeal of the industry’s McCarran-Ferguson antitrust protection should be a catalyst for a more scrutiny by the federal antitrust and other federal agencies.<sup><a href="#fn1">1</a></sup> And, as strongly suggested by the American Medical Association’s report that more than 74% of commercial health insurance markets are concentrated, scrutiny should include a retrospective investigation into the industry’s consolidation.<sup><a href="#fn2">2</a></sup> Such scrutiny would be consistent with the observation made by two U.S. Senators that the industry has, over the decades, acquired the market power “to raise prices, restrict competition and deny consumers choice.”<sup><a href="#fn3">3</a></sup></p> <p>Consolidation has undoubtedly contributed to the industry’s proclivity for anticompetitive conduct. A number of court cases have highlighted just how harmful that conduct can be for consumers and providers.</p> <ul> <li>In the Department of Justice’s Antitrust Division (DOJ) successful challenge to Anthem’s proposed acquisition of Cigna, it produced evidence that despite Anthem’s claims that any savings resulting from the proposed combination would be passed on to consumers, “Anthem’s internal documents reflect[ed] that the company has been actively considering multiple scenarios for capturing any medical cost savings for itself . . .”</li> <li>In the FTC’s unsuccessful challenge of a hospital combination in Philadelphia, the court reported that the dominant Blue Cross plan, Independence Blue Cross, threatened to terminate its contract with the hospital if the hospital’s Chief Executive Officer helped a competitor enter the market. “At halftime, IBC’s CEO and another executive told [the hospital CEO] that IBC would terminate its contract . . . [if the hospital] partnered with UPMC.” UPMC wanted to enter the southeastern Pennsylvania market as both a provider and an insurer.</li> <li>Private challenges to the Blue Cross Blue Shield network’s anticompetitive impact on competition and providers have resulted in one settlement to date. In that class-action suit, plaintiffs successfully alleged that Blue Cross “violated antitrust laws by entering into an agreement not to compete with each other and to limit competition among themselves in selling health insurance and administrative services for health insurance.” The plaintiffs argued that Blue Cross was able to charge higher rates for plans through the practice of limiting competition. Despite these serious charges and the resulting settlement, neither federal antitrust agency has given any indication that it intends to follow up and investigate this entrenched cartel or take any action to deal with the lack of competition and increase in prices laid bare by this private litigation.</li> <li>Blue Cross Blue Shield of Michigan’s prolific use of most-favored-nation’s clauses in its contracts with hospitals and health systems, which was intended to forestall competition from other health plans, was halted only when DOJ brought suit against the company.</li> </ul> <p>These cases are certainly emblematic of problematic insurer anticompetitive conduct. Yet, much of it appears to escape scrutiny by any responsible federal agency.</p> <p>Below is cataloged some of the anticompetitive conduct that merits scrutiny by one or both of the federal antitrust agencies acting alone or in combination with the Department of Health and Human Services (HHS). That conduct implicates a range of competition and consumer protection issues that should be subjected to prompt and serious scrutiny.<sup><a href="#fn4">4</a></sup></p> <h2>Bait and Switch Coverage Policies</h2> <p>Commercial health insurers compete for customers on basis of their offerings, including the network of providers and prescription drug formulary. Most insurers also provide financial incentives, such as lower out-of-pocket costs, for their customers who use in-network providers and formularies. Unfortunately, a growing number of commercial health insurers are engaging in tactics that substantially change the coverage their customers purchase without adequate notice, mid-year during the term of the policy. These changes can separate consumers from their chosen providers and result in much higher out of pocket costs. It is doubtful that consumers are aware these changes could occur because, among other reasons, it would be contrary to health insurers’ own messaging about how to select a health plan. Nevertheless, customers of a growing number of health plans are being subjected to unexpected coverage changes that restrict their access to care, separate them from their chosen providers, and/or result in much higher and unexpected out-of-pocket costs.</p> <p>Both Anthem and UnitedHealthcare (United) have implemented mid-year restrictions on their customer’s access to certain sites of care for surgical procedures. More specifically, both insurers are directing them away from in-network hospital outpatient departments to freestanding ambulatory surgical centers. These mid-year coverage changes reduce the number of providers available, can separate patients from their primary care provider, and are often implemented without regard to whether there is reasonable access to the centers that remain available. In some cases, such as with United, the insurer has a financial stake in the centers that remain covered by the policy.</p> <p>United announced that beginning July 1, 2021 — regardless of when its customers’ plan year starts and ends — it will implement a new “Designated Diagnostic Provider (DDP) program.” Under this program, United will eliminate coverage for diagnostic tests at all freestanding and hospital labs, including those with service providers who are in the health plan’s network, unless the facilities are named as a DDP. In order to become a DDP, freestanding and network laboratories must complete a programmatic registration process and meet certain thresholds for quality and efficiency that are not publicly available for review. If a United customer obtains care at a non-designated laboratory — even if that laboratory continues to be listed as in-network — coverage for those services will be denied and the customer will be responsible for payment in full.<sup><a href="#fn5">5</a></sup></p> <p>Several large commercial insurers, including United, Cigna, and Aetna have changed their prescription drug formularies mid-year in ways that eliminate access to their customer’s longstanding drug therapies. Specifically, each of these companies has tried to force customers who rely on biologic therapeutics to switch to a biosimilar without regard to whether that therapeutic has been designated by the Food and Drug Administration (FDA) as interchangeable, and has done so in the midst of treatment for cancer and other complex conditions. The FDA has a specific pathway to identify biosimilars that are interchangeable, meaning, in most cases, they can be used safely with the same therapeutic effect as the original biologic.<sup><a href="#fn6">6</a></sup></p> <p>All of these bait and switch tactics have the effect of restricting consumer choice and imperil their ability to get safe, convenient and appropriate care by their provider of choice without incurring unexpected costs.</p> <h2>United’s Specialty Pharmacy Restrictions</h2> <p>Referred to as ‘white’ and ‘brown’ bagging, United’s restrictions on specialty drugs raise serious supply and safety issues for some of its most vulnerable customers and those who treat them. United often operates both the ‘bagging’ programs through its Optum Rx subsidiary.</p> <p>“White bagging” prevents a provider from procuring and managing the handling of a patient’s medication. Instead, the provider must rely on a chain of pharmacies United owns or with which it has affiliation agreements to dispense and supply the provider with required drug. This requirement puts the provider’s patients whose immediate needs require a different medication, different dose or other accommodation at risk of indeterminate delays in treatment. Delays have also occurred simply as a result of the drug not being delivered as scheduled. This is particularly acute for cancer patients, but can impact nearly any patient with a serious medical condition that requires a physician-administered specialty pharmacy therapeutic. It also prevents providers from taking reasonable measures to assure the quality and appropriate handling of these pharmaceuticals for their patients.</p> <p>“Brown bagging” is similar to ‘white bagging’ but in this instance the United owned or affiliated pharmacy dispenses the drug directly to its customers who then brings the drug to the hospital or physician’s office. This practice creates many of the same issues as its counterpart, but gives providers even less ability to assure the quality and appropriate handling for these pharmaceuticals.</p> <p>It is unlikely that United makes consumers sufficiently aware of these ‘bagging’ policies and their implications for care when it markets its plans to consumers. For those with serious medical issues these policies not only certainly create confusion but the real likelihood for gaps in care that can have serious implications for their health and safety that providers cannot control.</p> <p>Notably, United’s policies may have encouraged other commercial insurers with substantial investments in pharmacy benefit managers and specialty pharmacy services, such as Anthem and Cigna, to implement similar policies for their customers.</p> <h2>United’s Relentless Acquisition of Physician Practices</h2> <p>United’s acquisition of physician practices through its OptumHealth subsidiary has been relentless. Its holdings include ambulatory surgical centers, surgical hospitals and urgent care services. OptumHealth entered 2021 with over 50,000 physicians and 1,400 clinics. Over the course of this year, Optum “expect[s] to grow our employed and affiliated physicians by at least 10,000. This work of building local physician-led systems of care continues to be central to our mission and is accelerating with notable progress in the Northeast, Pacific Northwest, and Southern California . . .” Optum is acquiring the 715-physician group Atrius Health — Massachusetts’ largest independent physician group. Optum also is reportedly acquiring Landmark Health, a physician-led in-home medical group operating in 17 states. In an earnings call earlier this year, United elaborated on the “outsize growth” of its “enterprise” describing its physician acquisitions as a “critical anchor strategy both for Optum as well as for UnitedHealth Group.”</p> <p>United’s rapacious acquisition of physician practices should be the subject of a retrospective investigation by the FTC and any acquisitions that have not been completed should be blocked. Not only does this accumulation of physician practices have the potential to limit consumer choice and increase prices, but, as a for-profit enterprise, it could deprive some Medicare and Medicaid patients of access to the physicians it acquires, as United has no obligation to serve those patients.</p> <hr /> <ol> <li id="fn1">See letter from Senators Leahy and Daines to Attorney General Garland and Chair Khan, July 20, 2021 <a href="https://vermontbiz.com/news/2021/july/20/ leahy-requests-updates-enforcement-antitrust-act-over-health-insurers" target="_blank">https://vermontbiz.com/news/2021/july/20/ leahy-requests-updates-enforcement-antitrust-act-over-health-insurers</a> (Leahy Letter).</li> <li id="fn2">The American Medical Association’s yearly reports demonstrate a steady progression of consolidation among commercial health insurers to 74% of metropolitan statistical areas. <a href="https://www.ama-assn.org/delivering-care/patient-support-advocacy/competition-health-insurance-research" target="_blank">https://www.ama-assn.org/delivering-care/patient-support-advocacy/competition-health-insurance-research</a>. Other studies confirm that consolidation in that industry primarily responsible for increased premium prices. ACA Marketplace Premiums Grew More Rapidly In Areas With Monopoly Insurers Than In Areas With More Competition HEALTH AFFAIRS 37, NO. 8 (2018): 1243–125.</li> <li id="fn3">Leahy Letter.</li> <li id="fn4">For a more in-depth review of the insurer conduct, see AHA letter to Ms. Elizabeth Richter, Acting Administrator Centers for Medicare &amp; Medicaid Services, Feb. 4, 2021 [<a href="https://www.aha.org/system/files/media/file/2021/02/aha-expresses-concerns-regarding-series-of-UnitedHealthcare-health-plan-coverage-policies-letter-2-4-21.pdf" target="_blank">https://www.aha.org/system/files/media/file/2021/02/aha-expresses-concerns-regarding-series-of-UnitedHealthcare-health-plan-coverage-policies-letter-2-4-21.pdf</a>], AHA letter to Acting Chairwoman Rebecca Slaughter, Federal Trade Commission, Feb. 4, 2021 [<a href="https://www.aha.org/system/files/media/file/2021/02/aha-urges-ftc-examine-anticompetitive-behavior-nurse-staffing-agencies-commercial-insurers- 2-4-21.pdf" target="_blank">https://www.aha.org/system/files/media/file/2021/02/aha-urges-ftc-examine-anticompetitive-behavior-nurse-staffing-agencies-commercial-insurers- 2-4-21.pdf</a>] and AHA letter to Richard Powers, Acting Assistant Attorney General, Antitrust Division, U.S. Department of Justice, Mar. 17, 2021 [<a href="https://www.aha.org/system/files/media/file/2021/03/aha-urges-doj-investigate-unitedhealth-groups-acquisition-change-healthcare-letter-3-18-21.pdf" target="_blank">https://www.aha.org/system/files/media/file/2021/03/aha-urges-doj-investigate-unitedhealth-groups-acquisition-change-healthcare-letter-3-18-21.pdf</a>].</li> <li id="fn5">In some states, pressure from state insurance regulators has caused UHC to alter the program to a tiered benefit structure.</li> <li id="fn6">This is similar to how generic drugs may be an appropriate substitute for branded drugs.</li> </ol> </div> <div class="field_topics"> <div><a href="/topics/mergers-acquisitions" class="topic" hreflang="en">Mergers &amp; Acquisitions</a></div> </div> <div class="field_type"> <div>Type</div> <div><a href="/taxonomy/term/127" hreflang="en">Guides/Reports</a></div> </div> <div class="field_access_level"> <div>Access Level</div> <div><a href="/taxonomy/term/278" hreflang="en">Public</a></div> </div> <div class="field_paragraphs_text_with_heade"> <div> <div class="paragraph paragraph--type--paragraphs-text-with-headers- paragraph--view-mode--default"> </div> </div> </div> <div class="field_lead"><div class="container"> <div class="row"> <div class="col-md-8"> <p>Scrutiny Needed to Prevent Adverse Impacts on Consumers and Providers</p> </div> <div class="col-md-4"> <div><a class="btn btn-wide btn-primary" href="/system/files/media/file/2021/08/anticompetitive-conduct-commerical-health-insurers-0821.pdf" target="_blank">Download the Report PDF</a></div> </div> </div> </div> </div> <div class="field_search_promotion"> <div>Search Promotion</div> <div>Not Promoted</div> </div> <h4 class="page-header">Key Resources</h4> <div class="field_related_files file file--mime-application-pdf file--application-pdf"> <div> <article> <div class="field_media_file"><span class="file file--mime-application-pdf file--application-pdf"><a href="https://www.aha.org/system/files/media/file/2021/08/anticompetitive-conduct-commerical-health-insurers-0821.pdf" type="application/pdf; length=82199" title="Anticompetitive Conduct by Commercial Health Insurance Companies">Anticompetitive Conduct by Commercial Health Insurance Companies PDF</a></span> </div> </article> </div> </div> <div class="field_archived"> <div>Archived</div> <div>Off</div> </div> Wed, 18 Aug 2021 11:00:00 +0000 Matthew Diener 679048 at https://www.aha.org