Washington, D.C. — There is an increasing lack of competition in health care markets with rising consolidation, horizontal and vertical integration, and profit-seeking behavior by nonprofit and for-profit hospitals alike. Health care payers and providers are also increasingly engaging in contracting practices that further seek to maximize profits, all while restricting patient choice, artificially inflating costs, and undermining health care quality. This new Center for American Progress issue brief explains anticompetitive contracting and its harms and recommends ways federal policy could improve competition in health care markets.
The recommendations for how to improve competition in health care markets include:
- Improve monitoring of mergers and acquisitions: Congress should amend the Hart-Scott-Rodino Antitrust Improvements Act to require merging entities to report past related mergers and acquisitions. This would ensure that the Department of Justice and the Federal Trade Commission (FTC) have the data they need to evaluate the cumulative effects of previous transactions, allow the agencies to assess the impact of new transactions that may impede competition, and enable providers and payers to extract anticompetitive terms.
- Ban the use of anticompetitive clauses: Congress should pursue measures that clarify congressional intent on the FTC’s existing authority to promulgate enforceable rules prohibiting anticompetitive practices. Congress should also pass legislation that specifically regulates, limits, and potentially outright bans the use of anticompetitive contract terms between providers and payers.
- Increase FTC authority over nonprofit health care entities: Congress should amend the FTC Act to close the loophole in oversight for nonprofit hospital conduct by passing legislation such as the bipartisan Stop Anticompetitive Healthcare Act of 2023.
“Fair competition is essential to ensure patients and payers have the information and options necessary to make choices about their medical care,” said Marquisha Johns, associate director of public health and co-author of the issue brief. “Congress should take action to ban the use of anticompetitive contract clauses and expand the FTC’s authority to better regulate.”
Read the issue brief here: “Policies To Combat Anticompetitive Practices in Health Care” by Nicole Rapfogel and Marquisha Johns
For more information or to speak with an expert, please contact Sarah Nadeau at [email protected].