Covering hospital mergers and acquisitions: 3 tips for journalists

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In searching for to win his present job, U.S. Well being and Human Companies Secretary Xavier Becerra assured senators that he’d stick along with his quest to forestall consolidation within the area of well being care from elevating prices for shoppers and companies.

“I consider that every one Individuals ought to have the ability to entry reasonably priced well being care, and a part of that’s figuring out options to hospital over-consolidation,” Becerra advised the Senate Finance Committee in February. “I hope I’ve the chance to work with you to deal with this concern and pursue options that strengthen our federal packages and defend sufferers and shoppers.”

In selecting Becerra, President Joe Biden tapped one of many nation’s main figures within the battle in opposition to increased prices of medical care attributable to consolidation. As lawyer basic of California, Becerra scored a notable 2019 win in opposition to one of many state’s largest hospital techniques, Sutter Well being, which included pledges by the medical group to halt practices that restricted insurers’ bargaining clout.  Each state and federal officers are beneath strain to handle the results of consolidation in well being care. The Federal Commerce Fee in January 2021 introduced plans for sprawling investigation into how hospitals mergers and acquisitions of doctor apply merger have an effect on competitors.

The variety of unbiased hospitals has declined in recent times because of mergers, whereas the variety of hospitals which can be a part of bigger techniques has risen, in line with a report from the nonprofit Kaiser Household Basis. By 2017, two thirds (66%) of all hospitals have been half of a bigger system, as in contrast with 53% in 2005, the report says. Different revealed experiences, together with a key one from the Medicare Cost Advisory Fee, have discovered hospital consolidation raises prices of well being providers. There are combined experiences on what occurs to the standard of care, as explored in an accompanying analysis roundup.

For journalists, there’s strain to cowl a posh subject amid conflicting data from competing organizations. Under are tips on easy methods to cowl hospital consolidation and the mixing of doctor practices provided by Reed Abelson, a longtime repoter on the New York Instances who covers the enterprise of well being care,  Dan Gorenstein, government producer and host of the well being care coverage podcast Tradeoffs and a former well being care reporter for Market; and Samantha Liss, a senior well being care reporter at Business Dive, who earlier reported on well being take care of the St. Louis Submit-Dispatch.

1. Comply with the small acquisitions.

There are two main traits in in well being care consolidation. There are mixtures of enormous organizations that present related providers, so-called horizontal mergers, which have a tendency to attract scrutiny from journalists and antitrust companies alike, amid considerations about such mergers driving up the price of medical care. However hospitals are also steadily buying smaller doctor practices — so-called vertical consolidation.

A few of these acquisitions don’t meet the minimal size-of-transaction bar to warrant antitrust investigations, clarify economists Cory Capps, David Dranove, and Christopher Ody in a 2017 Well being Affairs article. However revealed research and papers have discovered hospital consolidation in each varieties can increase the price of care, a subject lined in higher element in our associated analysis roundup.  

Vertical well being care consolidation additionally wants scrutiny, writes Erin C. Fuse Brown, director of the Middle for Legislation, Well being and Society at Georgia State College Faculty of Legislation, in an August 2020 article for the nonprofit Nationwide Academy for State Well being Coverage.

“Policymakers are actually beginning to understand the menace posed by vertical well being care consolidation, years right into a wave of vertical mergers that’s accelerating with the pressure on unbiased practices from the COVID-19 pandemic,” Brown writes in her article, titled “State Insurance policies to Handle Vertical Consolidation in Well being Care.”

Liss says it’s necessary for native information reporters to attempt to maintain tab on these smaller transactions occurring of their communities. Journalists could discover a sample akin to consolidation of the orthopedic specialists or obstetricians working of their area, provided that they concentrate, she says. In any other case, this consolidation can go undetected whereas a hospital builds up vital market dominance, Liss says.

“Possibly it’s that final deal the place of us understand, ‘Oh … this one entity controls X quantity of the surgical procedure facilities on this state’ or there aren’t any extra unbiased cardiologists or unbiased OB GYNs,” she says.

2. Ask employers and state attorneys basic for his or her views on consolidation, and get to know the neighborhood.

Many employers, particularly bigger ones, are opting to pay for some or all the well being providers for his or her employees straight from company funds somewhat than by buying medical insurance for them, in line with an October 2020 report from the nonprofit Kaiser Household Basis.

That offers these corporations a fair increased stake in monitoring what’s occurring with costs charged by hospitals and doctor places of work.

“They are often useful in explaining among the dynamics and the way it impacts their staff,” Abelson says.

She additionally recommends speaking to state attorneys basic who could monitor hospitals’ mergers and acquisitions. These can embrace insurance coverage departments and attorneys basic.

Liss urges journalists to make time to go to the communities prone to be affected by a merger.

Journalists can attempt to discuss to individuals in native companies like espresso retailers and likewise attain out to physicians working in what are known as unbiased practices, which means they don’t seem to be affiliated with hospitals. Liss additionally suggests contacting teams such because the Chamber of Commerce. In lots of circumstances, hospitals can be main employers in a neighborhood, generally even the most important one. By making an attempt to immerse themselves in a neighborhood, journalists can study what the individuals residing there hope a hospital merger or massive acquisition will do, she says.

3. Evaluate the revealed analysis on hospital consolidation. Hunt down consultants that can assist you clarify the conclusions of revealed papers in less complicated phrases.

Abelson, Liss and Gorenstein all advocate changing into acquainted with the research revealed on the results of hospital consolidation. The Journalist’s Useful resource covers a few of this work in an accompanying analysis roundup.

“The educational analysis could be an necessary underpinning for these sorts of tales,” says Abelson.

Getting ready this manner might help journalists ask questions in regards to the assertions hospitals could make about how consolidation can profit sufferers, all three journalists say. Hospitals, which regularly play a big position in neighborhood life, could not welcome these questions on their acquisitions, Liss says.

“It may be intimidating when you may have perhaps the world’s largest employer respiratory down your neck,” she says.

Gorenstein notes that journalists could solely have a couple of possibilities to elucidate for his or her audiences what’s at stake with hospital consolidation. Native reporters in resource-constrained newsrooms could not have the chance to report a couple of or two tales on the problem.

“You’re solely going to have so many alternatives to seize the essence of the story,” he says. “So that you wish to be sure that if you come out of the gate, you’re getting it proper and also you’re actually grounded within the proof and the information.”

A lot of the analysis on this area is a bit wonky, and should take a bit additional time to translate in your viewers. However many researchers are prepared to stroll journalists by way of their work.

“The educational neighborhood stands prepared to assist,” Gorenstein says.

Supply record

Under is an inventory of organizations and researchers who’ve advised The Journalist’s Useful resource they’re prepared to assist reporters.

  • Dr. Adrian Diaz, a nationwide clinician scholar on the College of Michigan Institute for Healthcare Coverage and Innovation. Diaz has revealed analysis taking a look at how consolidation impacts surgical procedure.
  • Dr. Susan Haas, an obstetrician-gynecologist and co-principal investigator of Ariadne Labs. Haas’ work contains efforts to grasp and keep away from the dangers to sufferers when consolidation of hospitals forces physicians to rapidly adapt to new apply settings.
  • Thomas (Tim) Greaney, a visiting professor at UC Hastings Legislation. A former assistant chief within the DOJ’s  antitrust division, Greaney specializes within the results of consolidation on well being care and the instruments the federal authorities has to watch these transactions.
  • Well being Care Prices Institute (HCCI). Supported by medical insurance, foundations and the analysis neighborhood, the nonprofit HCCI has a broad assortment of statistics accessible on U.S. medical spending.
  • Dr. J. Michael McWilliams , a professor of well being care coverage and medication at Harvard Medical College. McWilliams has revealed analysis papers on the results of consolidation on well being care.
  • Mark Miller, government vice chairman of well being care at Arnold Ventures. A former government director of the Medicare Cost Advisory Fee, Miller’s experience contains the talk about how federal reimbursement insurance policies have labored to encourage consolidation.

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