New HHS Secretary Xavier Becerra has a biography that may well have been created in a Republican war-room. As California Attorney General, he in court over the Affordable Care Act's contraception mandate. He lacks at the helm of an administrative behemoth like HHS. And he is a of Medicare for All bills that would abolish private insurance.
It is no surprise then that Becerra was confirmed in what was essentially a party-line vote, 50-49, with Susan Collins the only defecting Republican supporting confirmation. One might assume that such a bitter partisan fight would preclude cooperation between Becerra and congressional Republicans. This would be a shame, considering their shared concern over the effects of hospital consolidation. Indeed, given Becerra's past statements in support of increasing oversight of hospital mergers, as well as recent Republican movement on antitrust issues, the hospital consolidation issue offers a rare opportunity for bipartisan health policy action.
Increasing oversight of hospital consolidation is long overdue. Hospital acquisitions are associated with and , with . Proponents of hospital consolidation have argued that mergers lead to lower costs due to economies of scale, but these savings are likely mitigated by the price increases associated with consolidation – increases that are passed along to consumers in the form of higher insurance premiums.
As Bob Kocher and others laid out in a , hospital consolidation is abetted by outdated regulations governing catchment areas that inadvertently grant hospitals disproportionate pricing power. And as the medical system deals with the fallout from COVID-19, , likely due to the financial pressures associated with canceled elective surgeries and procedures.
To make matters more challenging, hospitals wield significant political power. While insurance companies receive the brunt of criticism in public debates over healthcare, hospitals are often immune from careful scrutiny. As physician and journalist Elizabeth Rosenthal , what politician possibly wants to take on the popular hospital in his or her home district? Not only do hospitals heal you and your loved ones, but they also are massive employers. Good luck trying to take on the hospital that in your hometown.
But there are signs that there may be cracks in hospitals' once-untouchable facade. As California attorney general, Becerra made hospital antitrust enforcement one of his top priorities and of for-profit hospital mergers. He also secured a against Sutter Health for antitrust behavior in Northern California. Vice President Kamala Harris also has a of pushing for increased oversight of hospital billing practices.
The push for increased hospital regulation is not limited to the political left. In August 2020, Rep. Jim Banks (R-Ind.) that would have increased funding for the Federal Trade Commission (FTC) by $160 million in order to prevent the formation of hospital monopolies. The bill focuses on hospital consolidation in high-cost urban areas while providing exemptions for hospitals in rural areas where, in stark contrast to the success of integrated health systems located in big cities, many hospitals are . Conservative openness to regulation of the hospital industry is consistent with the right's recent interest in .
An alliance of GOPers open to economic populism and Democrats in the Biden administration and Congress would represent a powerful cudgel against the economic and political power of hospitals.
A solid first step would be to increase FTC funding to regulate hospital mergers in order to ensure that consolidation does not lead to increased prices or decreased quality of care. Subsequent legislation could mandate that hospitals in dense metropolitan areas with significant market share – at least 50% – be subject to additional scrutiny over pricing practices. Such hospitals could also be required to accept all forms of public insurance, and they could be threatened with loss of nonprofit status for noncompliance.
Hospitals are linchpins of medical care, but the trend towards consolidation deserves further scrutiny in order to maintain and improve quality, stem rising costs, and protect patients. While Secretary Becerra's confirmation was intensely partisan, his record of taking on the hospital industry, combined with nascent Republican openness to the issue, could lead to much-needed bipartisan action.
is a medical student at the University of Pennsylvania. His research focuses on healthcare payment reform and outcomes.