March 1, 2019
Is healthcare consolidation a good thing? Absolutely yes. Or, not.
Will consolidation in healthcare harm patients? It depends on who you ask.
Hospitals buying or partnering with doctors’ offices, for example, creates no noticeable difference in quality for patients, according to America’s Health Insurance Plans President (AHIP) CEO Matt Eyles, but, he claimed, increases costs and network difficulties for payers.
Consolidation is necessary in today’s market, countered the Federation of American Hospitals (FAH) President and CEO Chip Kahn. “All the noted economists, insurance CEOs and policymakers who complain about so-called hospital consolidation are living in a total fantasy world,” he said.
The two spoke yesterday at a Nashville Health Care Council policy panel moderated by Melinda Buntin, chair of the Department of Health Policy at Vanderbilt University School of Medicine. The consolidation question was the biggest sore spot, but the conversation covered major federal policy issues from Medicare for All to surprise billing:
Provider consolidation is a necessary evil, or just evil?
Eyles argued that horizontal consolidation could give providers a dangerous amount of market power, compared to vertical consolidation among payers, which AHIP members, unsurprisingly, view as much less of a threat to quality care.
But Kahn expressed concern about scrutiny of hospital mergers.
“The hospital model is fundamentally changing. Inpatient revenue is no longer able to support many health systems because so much care is no longer being provided on an inpatient basis,” he said.
“We still need ICUs and emergency rooms. But it’s unrealistic to think we’re going to have individual units of free-standing hospitals competing with each other. It’s just not sustainable.”
Pay attention to Medicare for All.
Attendees seemed most interested in Medicare for All, and neither panelist withheld punches. “That bill being introduced is a tremendous disappointment for me,” Kahn said. His tone betrayed lingering exhaustion from nearly a decade of work – and political capital – spent on the Affordable Care Act, now undercut by subsequent U.S. Supreme Court decisions.
“Today, you can’t disregard any momentum,” he said, citing the 2016 presidential election. “This bill is symbolic but must be taken seriously.”
Eyles shared Kahn’s sentiment but found reason for optimism, at least superficially. “For me, I was just encouraged that Medicare for All was not H.R. 1 for this new House session.”
Surprise billing needs federal legislation.
The panelists agreed again when the conversation turned to the price of emergency care from unexpectedly out-of-network providers. Noting that states were hamstrung to address the issue because of the Employee Retirement Income Security Act of 1974 (ERISA), Eyles noted that the issue “will require a federal mechanism.”
Kahn, meanwhile, said he believes the issue has started a rare bipartisan conversation. “This is one of a set of issues where federal legislation, if it’s kept narrow enough in scope, could really solve some problems.”
The leaders’ comments echoed a great divide between their memberships. And the one area where payers and providers still can’t agree may prove to be one of the most important ongoing discussions about the future of the American healthcare system.