- Senate Judiciary Chairman Charles Grassley, R-Iowa, is urging the Federal Trade Commission to look into reports that some health systems and insurers may be entering into anticompetitive contracts that could reduce access to affordable care.
- In a Wednesday letter to FTC Chairman Joseph Simons, Grassley said U.S. spending on healthcare totaled $3.3 billion in 2016, or $10,348 person, and is expected to hit $5.7 trillion by 2026.
- Grassley cited a Wall Street Journal report alleging that major hospital systems impose restrictive provisions in their contracts with insurers "to protect their turf and block efforts to curb health-care costs."
According to Journal, hospitals have resorted to tactics such as demanding that insurers promote their use by members over lower-cost competitors and concealing prices from consumers. Grassley points to a Department of Justice lawsuit challenging Atrium Health's use of contractual agreements that prevent insurers from steering patients to lower-cost medical providers.
"The last thing American patients and consumers need at this time is a health care system that permits or encourages anticompetitive agreements that hinder access to lower cost care," the senator wrote.
If the FTC were to conduct an investigation, it could send chills through the hospital industry. Vertical integration is rampant in healthcare, and a number of health systems have established their own health plans. This could create more suspicion around such arrangements and increase the push for greater price transparency.
Pressure is growing for hospitals to be more open about pricing and what out-of-pocket costs patients can expect. A recent study in Health Affairs found that noncommercial payers such as automobile and workers' compensation insurers have less negotiating power than HMO/PPO insurers when it comes to hospitals prices, leading to high-cost encounters for enrollees in those plans.
"It is critical for Congress to understand the FTC's perspective on these issues, including whether contractual provisions — like those highlighted in recent reports — impact the cost of health care in the United States and whether consolidation in the marketplace magnifies the impact of such provisions," Grassley said.