Healthcare systems are increasingly looking outside of their markets for mergers and acquisitions partners, a trend that researchers say deserves more attention given the potential upside of deals. this translation.
More than half of the 1,500 hospitals targeted by health systems between 2010 and 2019 were located in a commuter area other than the acquirer, according to an analysis of American Hospital Association data published Monday in the journal Health Affairs. There are 625 commuter zones across the country, ranging from the size of one county to 20 counties.
Although data on the impact of cross-market mergers are limited, preliminary results suggest that hospitals in separate service areas may be able to negotiate higher fees with companies. coverage due to a common customer base – usually large employers claim coverage for their employees in different regions. However, the Federal Trade Commission is often hesitant to challenge cross-market mergers because antitrust laws focus on in-state hospital mergers and minimal legal precedent exists for the transactions. this other.
“Generally, intermarket hospital mergers are approved by the FTC. But since more than half of the mergers between 2010 and 2019 were in a travel region other than the acquirer, we couldn’t ignore it,” said Brent Fulton, lead author of the study and associate professor. Research on economics and health policy said. at the University of California, Berkeley.
State regulators, employers, trade unions and whistleblowers have accused some health systems of using anticompetitive contract clauses with insurers such as binding, in where systems leverage their market power to force an insurance company to include a high-priced hospital in their network. But the legal challenges arising from such concerns, which have had mixed success, require significant amounts of money and resources.
While federal regulators are revising their merger guidelines, the FTC primarily challenges hospital mergers in the same or in neighboring markets by measuring the concentration of hospitals. inpatient services. Barak Richman, a professor of law and business administration at Duke University, said antitrust law was not designed to analyze interstate mergers.
“Although hospitals are not in the same local market, once they are involved, they can increase prices and decrease quality,” said Richman at the Massachusetts Health Policy Committee meeting last week. “Also, by definition, this is not something antitrust law can do because it is designed to look at competition in specific markets.”
According to the study, the number of systems in urban commuting areas that can utilize multi-market power has increased from 37 systems in 2009 to 57 systems in 2019.
Although it was not named in the study, one recent example involves Advocate Aurora Health’s proposed merger with Atrium Health, which would combine a 27-hospital system in Illinois and Wisconsin with a system of 40. in North Carolina, South Carolina, Georgia and Alabama. Additionally, Intermountain Healthcare and SCL Health completed a merger in April, forming a network of 33 hospitals across seven states.
