Skip to main content

Note: This piece was originally published over the weekend in our Sunday newsletter. Want content like this delivered to your inbox before it hits our blog? Subscribe here.

2-minute read

The Big Story: FTC, DOJ ask for public input in antitrust ‘overhaul’

In a move entirely consistent with the executive branch’s stated goals on M&A, the feds are ramping up an effort to “bolster merger oversight” and “modernize enforcement.” They’re particularly concerned about vertical integration which, they say, may not lead to the efficiencies often promised. Plus, they’re eyeballing scaling health systems’ smaller acquisitions, as those transactions may “skirt regulatory review.”

What it Means for Your Health System

The FTC isn’t just giving lip service to looking more closely at mergers. They’re also digging deeper during the review process. Regulators are requesting more information from health systems and healthcare companies than usual and they’re soliciting public comment. Both, of course, slow down any given transaction.

That’s sure to raise eyebrows at any health system considering a partnership. And there are many of them talking about it in their board rooms right now. Some put a deal on hold due to the pandemic and are coming back to it. Others weren’t looking to partner until pandemic pressure created the need.

All in all, the ball is rolling downhill for the antitrust crowd. They have their target in sight and they’ll be flooding the comments. It’ll be tough for healthcare organizations to push back, but we at Jarrard Inc. don’t think it’s an impossible task. The goal, for starters, should be to balance the comments in a meaningful way and point out where the critics have the narrative wrong. Here’s what that looks like:

Be ready to engage. Don’t wait for anyone to jump in on your behalf. While there’s certainly value in coordinating with associations, you have a distinct story to tell about your organization and community. Focus there and don’t assume that aggregated advocacy will suffice. And when you do appropriately engage in the public comments process, be proactive, not defensive.

Engage with real stories. The prevailing narrative is that consolidation leads to higher prices, lower quality and reduced access. But what about the real stories about mergers that saved healthcare in communities, saved access and improved patient care? Tell those stories and explain how it will work in your community. Your adversaries are using both academic studies and emotional patient narratives. Numbers backed by real faces on camera are a powerful cocktail. You should do the same.

Be specific. Price, quality and access are the areas that FTC is scrutinizing. Hospitals need to give very specific examples of how their proposed deal would address those concerns. That means avoiding platitudes like “We’re going to transform healthcare,” or “This partnership will ensure care for years to come.” Instead, say, “We are going to ensure high quality care by…” and “We will improve access through…” Similarly, where there may be changes – like L&D services leaving a low-volume rural hospital – explain exactly why it may happen and how you’re going to help expectant mothers. When they speak, your critics give specifics rather than rely on vague allusions. Take the lesson and apply it.

*A note on the cost of care: Everything in society is getting more expensive, and according to our latest consumer survey, the cost of healthcare is one of the public’s top concerns. Price is a line of attack hospital critics bring out at every opportunity. When discussing the effects of a proposed merger, be ready with necessary nuance. Talk about how and why prices won’t go up due to the partnership, why it won’t be the merger that further accelerates the increase. If you are the buyside, be ready to show (or defend) your track record of prior mergers and how cost of care played out. And if increases are going to happen, be upfront about the reasons.

Drive change and educate. Talk frequently about the innovation your organization will continue or pursue thanks to the partnership. Get into the specific things you can do to control costs or improve access. Help the public understand that healthcare overall is working toward better utilization of care. Focus on ways that your organization is investing (or will invest) in getting people the right level of care at the right time. Explain that this doesn’t always mean more services, but rather helping patients avoid overutilizing expensive or unnecessary services. The bonus: This helps people understand how they can make better choices that benefit them.

Start internally. When talking about a merger, ensure your employees and physicians truly understand what it means. Our latest survey found that healthcare workers are somewhat more skeptical of mergers than the public, so it’s critical to allay the fears of those on the inside. Provide crystal-clear messaging about how it will work and how it will and will not affect them. Speak in terms that people can understand and give them opportunities to respond and question. Then do the same publicly.

Always answer the question, “Why is this good for the patient?” Need we say more?

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.