The Federal Trade Commission and the Department of Justice are becoming increasingly concerned about cross-market mergers in the healthcare industry, according to a recent JD Supra Business Advisor report.
The growing concerns of government antitrust enforcers stems partly from the potential for providers to get greater bargaining power with payers when they enter into cross-market merger deals, according to the report.
"We now also hear growing concern that provider consolidation in non-overlapping product or geographic markets may also lead to higher prices," said Edith Ramirez, FTC chairwoman, at a recent healthcare competition workshop hosted by the FTC and the DOJ.
Leemore Dafny, a former deputy director for healthcare and antitrust in the FTC Bureau of Economics, cited a 2014 paper in a presentation she gave at the workshop that showed out-of-market systems acquiring independent hospitals led to hospital prices rising 14 to 18 percent between 2000 and 2010, according to the report.
Based on the comments from top officials at the FTC and DOJ at the workshop, here are three things healthcare providers need to know about antitrust enforcement and cross-market mergers.
1. Providers "should not assume that mergers between healthcare providers in different markets will sail through the approval process," according to the report.
2. When a cross-market merger gives providers some perceived bargaining advantage, it may draw the attention of federal antitrust enforcers.
3. The FTC and the DOJ are open to listening to payer complaints concerning the price effects of cross-market mergers.
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