Merger Guideline Changes Offered for Comment by DoJ, FTC
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The Federal Trade Commission and Department of Justice jointly announced (here) proposed new guidelines (here) for the evaluation of business combinations, such as mergers, which may serve to reduce competition. “The goal of this update is to better reflect how the agencies determine a merger’s effect on competition in the modern economy and evaluate proposed mergers under the law. Both agencies encourage the public to review the draft and provide feedback through a public comment period that will last 60 days.”
Separately, AHLA comments (here) on proposed changes in Hart-Scott-Rodino pre-merger rules (here in the Federal Register, comments on these proposed rules due August 28).
The guidelines were first issued in 1968, and updated six times since then. In January 2022, the agencies announced a broad initiative to evaluate potential updates and revisions to the Horizontal Merger Guidelines, issued in 2010, and the Vertical Merger Guidelines issued in 2020.
The guidelines are aimed at evaluating mergers in thirteen areas, almost all of which are found in hospital and other health organization combinations. “They should not significantly increase concentration in highly concentrated markets, not eliminate substantial competition between firms, should not substantially lessen competition by creating a firm that controls products or services that its rivals may use to compete.”
Also, the proposed guidelines hold that “Vertical mergers should not create market structures that foreclose competition, should not entrench or extend a dominant position, should not further a trend toward concentration.”
Of import in evaluating physician group combinations, the guidelines hold that “When a merger is part of a series of multiple acquisitions, the agencies may examine the whole series.” Of import to unions and non-unionized workers alike, “When a merger involves competing buyers, the agencies examine whether it may substantially lessen competition for workers or other sellers.” Comments on the proposal are due September 18, 2023.
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
How to Address Burnout, Moral Injury, Quiet Quitting and Stress Among Hospital Physicians and Nurses
A study by Aiken and colleagues (here) in JAMA Health Forum attempts to evaluate strategies to deal with health field professional burnout, with special focus on turnover, outcomes and patient safety. Researchers examine “corporatist” strategies, such as “wellness programs,” and find them inferior to a “plain vanilla” strategy of adding staff to meet patient needs.
“This cross-sectional multicenter survey study of 15,738 nurses and 5,312 physicians found high and widespread burnout among clinicians in hospital practice that was associated with frequent turnover and patient safety concerns. In addition, clinicians lack confidence in management to resolve patient care problems and rated improvements in staffing and work environments as more important to their mental health and well-being than instituting clinician wellness and resilience programs.”
How Large Are Large Physician Groups in the U.S.?
Becker’s reports that the ten largest physician groups by number of practice locations (here) range from 700 to 2,300. Ranked by total Medicare charges (here), the ten largest groups annually range from $2.5 billion to $7 billion per year. The latter report indicates that 125,000 physician groups could be counted in 2021, ranging in size from one to 13,500 physicians.
HOSPITALS, ASCs, SKILLED NURSING AND OTHER HEALTH CARE FACILITIES
HCA Accused of Pushing Hospital Patients Into Hospice Care, to Lower HCA Hospital Death Rates
HealthcareDive reports (here) that “SEIU, the largest healthcare workers union in the U.S., is accusing for-profit hospital giant HCA of inappropriately transferring patients to hospice centers to reduce its mortality rate, thereby boosting profits and executive compensation.”
“The union’s report is partially based on an analysis of Medicare claims data, which found HCA hospitals have a higher average rate of patient transfers to hospice than the national average, and the system’s transfer rates are increasing. At the same time, HCA’s in-hospital mortality rates have been below the national average over the past few years and have grown more slowly than the national average. SEIU said the findings raise questions about potential corporate interference to decrease the number of patients who die in HCA hospitals.”
A similar report is here, from NBC News. “This article is based on interviews with six nurses and 27 doctors who currently practice at 16 HCA hospitals in seven states or did so previously. All said their HCA hospitals pushed palliative and end-of-life care in pursuit of better performance metrics. Internal HCA hospital documents and texts between hospital staffers provided to NBC News support these health care professionals’ views.”
Fooling Watson: “Entities rating the quality of care at hospitals track inpatient mortality rates — the popular IBM Watson Health Top Hospitals ranking is an example. HCA’s in-hospital mortality rate is important in another way — it is one of 10 ‘quality of care’ metrics used since 2021 to calculate the incentive pay received by top company executives, its financial filings show. In other words, better mortality results at HCA contributed to better company performance for executive pay purposes . . . Over the two years that HCA’s board has used mortality rates to calculate incentive pay, Samuel Hazen, HCA’s chief executive, received $35.3 million in total compensation. Some $305,400 of that was incentive pay generated by the mortality rate calculation, HCA said. Through a spokesman, Hazen declined an interview. The three major publicly traded hospital companies that HCA considers competitors do not cite the use of mortality rates in their pay calculations, securities filings show. They are Community Health Systems Inc., Tenet Healthcare Corp., and Universal Health Services Inc.”
MEDICARE, MEDICAID AND COMMERCIAL HEALTH INSURANCE
Elevance (f/k/a Anthem) Reports on Q2, Double Digit Growth
The CEO in a quarterly earnings transcript from Seeking Alpha (here) said “We are pleased to share that Elevance Health delivered strong second quarter results, driven by solid execution and continued progress towards our strategy of becoming a lifetime trusted health partner.”
The CFO reported, “During the quarter, medical membership declined by 135,000 members as the majority of our Medicaid states initiated eligibility redeterminations. While we are still very early in the redetermination process, at this time, we are seeing many Medicaid members losing coverage for administrative reasons.” Revenue in the quarter increased by nearly $5 billion, almost 13% greater year-over-year, resulting in a 12% increase in operating gain. One analyst asked about the impact of COVID-19, with this response: “We had already included the elevated cost structure into our pricing.”
Progress on Prior Authorization
Becker’s reports (here) on positive changes in mitigating the impact of prior authorization this year. ProPublica examines (here) how often health insurers say “No” through prior authorization and other tactics. The answer: Nobody knows.
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Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org
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