Robert Leibenluft, Jul 17, 2012
The past few years have been marked by increased consolidation among health care providers. Hospitals are merging with each other, physician groups are combining to create much larger, often single specialty practices, and hospitals are acquiring or employing an ever -growing number of physicians. Some observers have suggested that the Patient Protection and Affordable Care Accountable Care Act (“PPACA”) has encouraged this consolidation, and that the Act will prompt even greater consolidation-with adverse competitive effects-as providers form accountable care organizations (“ACOs”), which under the Act have the potential to share savings with the Medicare program but which also will likely negotiate with commercial health plans on behalf of independent providers. Is this, then, an example of contradictory government policies that ultimately will make it even more difficult to rely on competition to reduce health care costs and improve quality?
The short answer is “not necessarily,” but changes in the health care sector will require antitrust enforcers and health care regulators to apply more sophisticated approaches to ensure that our reliance on competitive health care markets is well-placed. Some of the health care sector changes are a result of or will be hastened by PPACA, but others would have occurred in any case, even without the passage of federal health care reform.