Policy disconnect threatens better healthcare for rural America

Whatever you think about the Affordable Care Act – and nearly everyone has an opinion, at least in Washington – it cannot be denied that the law will dramatically change how we deliver and pay for health care. Even while Congress and the administration wrestle with its implementation, the ACA’s basic tenets already have driven change in the marketplace as hospitals and other providers adjust their business models to more effectively accommodate ACA mandates.

Ironically, however, the underlying goal of the law – lower cost, better quality, and broader access to care for more Americans – faces a significant threat from within the Obama administration itself as the federal government’s own rigorous application of antitrust laws could  well thwart that goal in certain rural and smaller urban markets. These competing forces reflect a policy conflict within the administration that might undermine the centerpiece accomplishment of the Obama presidency.

Understand first that one imperative under the ACA is the transition of the provider community from a payer system that rewards the volume of care delivered to one that rewards the value of care delivered. The measure of success for both hospitals and physicians will be patient outcomes and keeping people healthier and out of hospitals. This value proposition seeks high-quality care and better value for more patients while also reducing costs.

So, the system must become more efficient and better at coordinating care across multiple providers. To this end, certain provisions of the ACA promote or even require coordinated care among providers. We see the signs of this increased collaboration in the hundreds of providers who have shifted their practices to an accountable care organization model.

So on the one hand, the administration seeks to avoid waste and duplicative health care services, thereby controlling costs in defined geographic markets. On the other hand, however, regulators want to preserve consumer choice and competition in those markets. In rural and smaller communities, where resources and competition already are scarce, the result is that providers are discouraged from merging to create more efficiency and improve continuity of care, lest they be accused of anti-competitive behavior.

Over the past couple of years, the Federal Trade Commission (FTC) has engaged in lawsuits against provider groups in these smaller and rural markets, including Phoebe Putney Health System in Georgia, ProMedica health system in Ohio, Reading Health System in Pennsylvania, and Renown Health in Nevada.

Most recently, St. Luke’s Health System, in Boise, Idaho, has been targeted by the FTC which joined a lawsuit brought by another large local hospital system, Saint Alphonsus, claiming that St. Luke’s has engaged in anti-competitive behavior. At issue is St. Luke’s work to develop its physician network beyond Boise into neighboring communities, and to provide those communities with the cost and quality benefits of a full, clinically integrated system to coordinate care.

That goal is fully compatible with the spirit and the letter of the ACA.

To make its integrated model work and obtain the maximum benefits of clinical integration for patients, St. Luke’s needs as many physicians as possible in its network, using the same information and data management system and subscribing to the same standards of care. But here is where the laudable goals of the ACA run up against the policy stance of the FTC.

The commission and St. Alphonsus cried foul – and filed suit in federal court – when a local physicians group in Nampa, a town of 80,000 in Southern Idaho, sought to become part of the St. Luke’s system. Like many physicians, the Nampa group wants a relationship with a larger system to achieve the critical mass needed to make the care and cost benefits of integration possible. But the complainants said the combination could constitute anti-competitive behavior. The trial has reached its final stages.

It seems the administration’s left and right hands don’t quite know each other. The ACA is supposed to stand for improved efficiency through more integration and better coordination among care providers, which will ensure better patient outcomes and more value for our health care expenditures. We must not derail nascent efforts toward these goals with overly aggressive trust- busting in underserved areas.

Organizations, such as the Rural Policy Research Institute (RUPRI) have urged the FTC and Congress to adjust the criteria for monitoring the antitrust implications of provider mergers and acquisitions to account for the scale differences in rural health care markets. RUPRI says rural areas typically have greater challenges in attracting health care professionals and providers, and lack of competition in rural communities more often results from a limited supply of providers rather than anti-competitive behavior by hospitals.

The ACA promised to level the playing field. But the FTC’s action of late suggests the formula doesn’t apply if you happen to live in a small or rural market. If the concept of clinical integration will better serve patients in Washington, D.C., New York, and Boston, why shouldn’t rural patients in Idaho, Georgia, and Ohio have access to the same benefits?

It’s time for the White House to ensure that all its agencies get on the same page. If the ACA is going to fulfill its promise of better, more efficient care, it has to work equally well for all Americans.

Siegel is president and CEO of America’s Essential Hospitals.