FTC draws large response on how to enforce healthcare competition

As the Federal Trade Commission steps up its enforcement of healthcare competition, issues ranging from hospital consolidation to pricing transparency have become hot-button topics.

So when the agency issued a request for public comments following a March healthcare competition workshop, close to 200 letters poured in.

Groups representing providers and insurers were among the constituents that voiced their concerns on topics ranging from physician regulation to data sharing. Public comments were accepted through May 16.

The American Hospital Association, in a letter dated March 10 (PDF), expressed its support for state regulations that require hospitals to disclose price information for certain inpatient and outpatient procedures. However, it asked for more standardization from payers.

Hospitals are getting caught in the labyrinth of insurance policies such as preauthorizations and admissions requirements, the AHA wrote, and spending more administrative resources on billing and claims processing as well as helping patients understand their coverage.

America's Health Insurance Plans, the trade group for payers, tackled the issue of hospital mergers, pressing the FTC to “continue to challenge (PDF) transactions in which assertions of quality improvements are counterbalanced by likelihoods of higher prices for consumers.” It pointed to the FTC's lawsuit to block St. Luke's acquisition of Saltzer Medical Group as an example of when providers tried to use the argument that consolidation was necessary to improve quality.

UnitedHealth Group similarly cited market power and consolidation as one of its key concerns. “It is important that the advantages available to organizations with greater access to data, human and financial capital, and new payment/delivery models (all of which can benefit consumers and enhance competition) are not overshadowed by excess market power that raises costs and reduces competition,” according to the company.

Payers and providers alike seemed to oppose “all payers claims databases” that have been established in some states and aim to reveal specific negotiated rates between hospitals and health plans. Both AHIP and the Federation of American Hospitals, which represents investor-owned chains, said the databases may have the counterintuitive effect of driving up prices, particularly in markets with less competition.

The FAH also had a bone to pick about what it described as “outdated and archaic” corporate practice of medicine restrictions, which set limitations on which entities can employ doctors. The restrictions recently led Tenet Healthcare Corp. to partner with the Yale New Haven Health System to circumvent rules in Connecticut that would prevent it from employing physicians at three hospitals it is trying to buy in the state.

“Given the rise in managed care and the advent of increasingly integrated care delivery, the public benefit of physician autonomy versus the public benefit of provider flexibility with respect to forming more efficient and effective models of care delivery should be reevaluated,” the FAH wrote.