GOP lawmaker introduces bill clamping down on hospital consolidation

GOP lawmaker introduces bill clamping down on hospital consolidation
© SEBASTIEN VUAGNAT/AFP via Getty Images

Rep. Jim Banks (R-Ind.) introduced legislation Tuesday aimed at increasing hospital competition to help drive down health care costs.

The bill — the Hospital Competition Act of 2020  — would authorize $160 million for new staff at the Federal Trade Commission (FTC) to ensure hospital mergers don’t lead to monopolies. It also includes provisions designed to disincentivize consolidation in high-population areas by requiring hospitals in cities to accept Medicare Advantage, with exemptions for hospitals in rural areas that have less than 15 percent market share.

Banks argued the legislation is needed to bring down the cost of care at a time when people face steep bills due to the coronavirus pandemic.

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“Patients already suffering medically don’t need to suffer economically as well,” Banks said in a statement.

“In the midst of a global health crisis, hospital monopolies in large, urban areas may be tempted to profit from the pandemic. This bill would prevent that from happening. Instead, we should use this opportunity to lower health care costs for all Americans.”

The FTC and Pennsylvania's Attorney General Josh Shapiro (D) sued in February to block the merger of Jefferson Health and Einstein Health Network, citing concerns it would eliminate competition and lead to increased prices.

The Justice Department raised similar concerns when it took legal action in August to prevent a partial merger between Evangelical Community Hospital and Geisinger Health.

Studies have show that hospital mergers have in many cases led to an increase in patient costs.

A 2018 study conducted by Yale health economist Zack Cooper found that prices at "monopoly hospitals are 12 percent higher than those in markets with four or more rivals"

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Pacific Business Group on Health — which represents major corporations including Walmart, Boeing, Comcast and Intel — sent a letter to congressional leadership in both parties urging Congress to implement a year-long ban on hospital mergers and acquisitions of health care providers for those who received coronavirus stimulus funding due to concerns over an uptick in costs for employers and patients amid the pandemic.

 

Under Banks's bill, states would be provided $1 billion annually in an effort to increase competition while requiring hospitals to publish costs for their 100 most common services and “honor price-lists for related bundles of discrete services such as prenatal care and childbirth.”

The FTC would be granted the authority to investigate tax-exempt hospitals it suspects of utilizing practices that may hinder competition. The measure also would prevent hospitals and insurance companies from utilizing contract provisions, which proponents argue will prevent health care providers from raising prices on patients.

The bill is unlikely to advance in the Democrat-controlled House.