Fresh off the Federal Trade Commission’s successful challenges to four hospital mergers, the Biden administration’s new majority on the commission is primed to more aggressively combat consolidation in the health care industry than it has in past years.
Although hospital mergers were supposed to improve cost efficiency, experts agree that the creation of huge conglomerates and hospital networks has driven up U.S. medical costs, which are by far the highest in the world. Many enjoy near-monopoly pricing power.
Last year, President Joe Biden ordered the FTC and other federal agencies to promote market competition in health care and other industries. Biden said hospital mergers and acquisitions had left the 10 largest health care systems in control of a quarter of the market and led to the closure of hospitals in rural and other underserved areas.
“We are feeling invigorated and looking to fulfill the executive order’s call to be aggressive on antitrust enforcement,” said Mark Seidman, an assistant director in the FTC’s Bureau of Competition, who chatted with KHN about the agency’s efforts on health care (see accompanying interview). The trade commissioners say this is a key way to slow health care price increases; protect patient access to and the quality of care; and prevent employee layoffs, pay cuts, and unfair labor practices.
But antitrust experts said finding the right cases to test more muscular enforcement theories will take the FTC time. And bringing such cases will almost certainly trigger pushback from Republican commissioners, the health care industry, and the courts. They argue that some mergers continue to make sense, helping lower costs while preserving access for patients, employers, and insurers.
“By overinvestigating, you are putting a tremendous burden on parties seeking to do combinations that are beneficial, potentially …