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Lauren Dubinsky, Senior Reporter | May 15, 2014
From the May 2014 issue of HealthCare Business News magazine
“The FTC and Justice had about two decades’ worth of a fairly unsuccessful track record at challenging hospital mergers,” says Dube. “I think that the FTC and DOJ are feeling their oats, especially under a Democratic Administration where enforcement of the antitrust laws is viewed as a priority.”
But it’s not only the federal antitrust agencies that are starting to challenge these mergers, state attorneys are as well. They are increasingly looking at the mergers to determine what impact they might have on consumers within a state, says Dube.
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The antitrust agencies’ and attorneys’ main concern is that these mergers will lead to less competition and result in higher costs. But that’s not something that’s easy to measure.
“It’s a community by community evaluation as to whether that’s a realistic risk,” says Dube. In highly competitive marketplaces such as those in Chicago, New York and Los Angeles, there are so many consumer and payer alternatives that the likelihood of a consolidated system obtaining market power is fairly low, he adds.
But he doesn’t deny that in some situations it is possible that a large health system can use its clout to get higher rates from third-party payers.
Even though Dube believes that hospital consolidations will accelerate into the future, he doesn’t think that large health systems will dominate health care. “I think we’ve been hearing for decades about the creation of just a handful of super-systems nationally, but I’m not quite sure we’re going to get to that level,” he says.
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