February 03, 2021
On January 14, 2021 the Federal Trade Commission (FTC) announced that it would conduct a study on the impact of recent provider mergers on competition and prices, with the ultimate goal of strengthening enforcement efforts. The FTC enforces antitrust laws in health care markets to prevent anticompetitive conduct. We summarize below the key details and potential impacts for employers and employees.
The FTC announced that it will collect data from 2015 to 2020 from six large insurers to study the impact of physician group and health care facility consolidation. The FTC is seeking to strengthen analytical tools with recent data as it considers enforcement efforts. Specifically, the study will collect patient-level commercial claims data for inpatient, outpatient and physician services in 15 U.S. states. The FTC notes that the study will also provide policymakers evidence documenting how mergers and acquisitions affect the “proper functioning of healthcare markets”.
The FTC’s study could lead to a more assertive and proactive approach to challenging anti-competitive industry consolidation with strengthened analytical tools. This change could help protect employers and employees from unwarranted higher costs due to excess provider market power, discourage further anti-competitive arrangements and winddown existing arrangements. Stepped up scrutiny by the FTC may also help ensure that integrated provider arrangements (ACOs, medical homes and others) create benefits and cost savings for payers and patients.
Insurers are required to issue their data to the FTC no later than April 20, 2021. It is unclear when the results of the study will be available. Employers, employees and other purchasers should be encouraged by the FTC’s renewed focus on health care competition that could put downward pressure on spending, which is projected to rise to an average of just over $15,500 per employee in 2021, according to the Business Group on Health’s 2021 Health Care Strategy and Plan Design Survey.
We provide this material for informational purposes only; it is not a substitute for legal advice.