1. Strengthening Antitrust Enforcement
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Evidence largely suggests that hospital mergers, particularly those involving hospitals in the same local market (horizontal consolidation), lead to higher prices with mixed or negative effects on quality.
- Tighter Merger Review: Policy proposals call for the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to strengthen their oversight of mergers and acquisitions. This includes:
- Lowering Scrutiny Thresholds: More rigorously challenging mergers that previously might have gone unchallenged, especially in already concentrated markets.
- Reviewing Serial Acquisitions: Requiring merging entities to report on past related acquisitions to evaluate the cumulative, anticompetitive effect of a system’s long-term expansion.
- Increasing FTC Authority: Legislating to close loopholes that exempt some nonprofit hospital entities from FTC oversight, subjecting them to the same scrutiny as for-profit entities.
- Banning Anticompetitive Contract Clauses: Health systems with significant market power often use contract provisions that limit payer options and raise prices. Policies advocate for banning or restricting clauses such as:
- All-or-Nothing Clauses: Requiring an insurer to contract with all providers in a health system if they want to contract with one.
- Anti-Steering Clauses: Prohibiting an insurer from using financial incentives to steer patients toward lower-cost, competing providers.
- Anti-Tiering Clauses: Preventing an insurer from placing a health system’s providers in a non-preferred network tier.
2. State-Level Price Regulation and Oversight
Since federal antitrust remedies are often reactive and difficult to implement after the fact, states are becoming “laboratories” for more direct price controls:
| Policy Tool | Mechanism | Goal for Hospitals |
| Price Caps | Limits hospital payments for services to a percentage of a benchmark, often 200% to 250% of the Medicare rate. | Constrain the ability of consolidated systems to command extremely high prices from private insurers. |
| Global Budgets | Sets an overall limit on how much a hospital system can spend or how fast spending can grow (e.g., Maryland’s model). | Force systems to improve efficiency and reduce utilization, rather than simply increasing prices or volume. |
| Health Market Oversight | State commissions or agencies gain authority to review and potentially block major health care market transactions, including those below the federal reporting threshold. | Provide an extra layer of state scrutiny to transactions that might negatively impact local access and affordability. |
