A diverse panel of experts at the American Enterprise Institute on Tuesday criticized the federal government for not doing more to crack down on anticompetitive behavior in healthcare.
"I really believe that competitive forces could help discipline this colossus" of private enterprise, Jeff Goldsmith, national adviser for healthcare at consultancy Navigant, said at the event. "But I'm not sure how we're going to get there without regulation."
The conservative think tank convened the panel a day after HHS issued a 119-page report on how to foster competition in U.S. healthcare, an effective wish list for the administration in deregulating the industry. "Healthcare reform should rely, on the extent possible, on competition in the private sector," HHS Secretary Alex Azar said in a speech closing the AEI event.
The Trump administration has long argued that deregulation will increase consumer choice and foster innovation in healthcare, but experts meeting at the free-market AEI said it's not so simple.
Healthcare M&A amounted to over $315 billion in the first half of 2018 alone — roughly double the activity in the same time period last year, according to Thomson Reuters. Amidst this hotbed of consolidation activity, panelists at the AEI event called into question whether the aims of deregulation and consumer choice are compatible, chiding what they see as a laissez faire antitrust division.
"Competition won't work in healthcare unless it's managed," Mark Hall, director of health law and policy at Wake Forest University, said. The federal government can't leave that up to the states, he added.
Attacking the oft-repeated Trumpian healthcare stance of patient-as-consumer, Goldsmith, who is a cancer survivor, cited his own experience. "The idea that I was a consumer when I was fighting cancer was insulting to me."
This AEI panel going off in seeming consensus on the near oxymoronic theme of trying to fight anti-competitive behavior in health care while devolving authority to the states, who are far more captured by industry in general than the federal government.— Loren Adler (@LorenAdler) December 4, 2018
Goldsmith said that in most states he's worked the state medical body has been the most powerful political faction and held state legislators under its thumb. "Even in places where you have an unambiguous federal road" to cracking down on anti-competitive practices, he said, the Trump administration hasn't been taking it.
"This is something the federal government can do and hasn't done," Goldsmith said.
Brian Blase, special assistant to the president for healthcare policy, pushed back against the criticism. "Government policy represents the main reason that choice and competition are suffocated in healthcare markets," he said.
But the government is "very concerned" about recent consolidation, Blase said, especially in the provider arena. He called it "vital" that the FTC and antitrust departments keep an eye on unfair methods of competition.
And vertical provider mergers in particular need more antitrust enforcement, said Barak Richman, a law professor and healthcare policy researcher at Duke Law School. The practice of hospitals snapping up physician practices locks in their market power, prevents entry of new players and technologies into the market and enshrines the "antiquated business model" of fee-for-service.
"More federal aggressiveness would really help solve … industrial consolidation," which prevents the healthcare sector from moving more smoothly to value-based care, Richman said. "Antitrust enforcement is the easiest and most effective way to start changing policy tomorrow."