Competition

Beneficiaries, patients, and communities benefit from competition in healthcare markets. In competitive markets, participating entities must distinguish their products and services from others by demonstrating higher quality, better outcomes, greater innovation and technology, and more affordable prices. To enhance their ability to compete, companies leverage financial transactions to maximize efficiencies, reach new customers, scale operations, diversify product lines, and achieve economies of scale. In healthcare, these goals ideally result in better care delivery and improved outcomes for patients.

The Federal Trade Commission’s (FTC) oversight and enforcement spans the healthcare industry with the FTC investigating matters such as: “empirical studies of generic drug entry, contact lens sales, and mail order pharmacies; formulary manipulation by pharmacy benefits manufacturers; physician practice mergers and hospital acquisitions of physician practices; mergers involving non-profit hospitals and of state ‘any willing provider’ laws.”¹ Nearly every segment of the healthcare industry has been assessed and, in some cases, targeted.

Key challenges include:

• Stereotyping the capital investment industry overlooks investors’ indispensable role in supporting business growth and innovation, creating jobs, developing new products, and preserving access to essential services.
• Delaying timely, efficient completion of mergers and acquisitions can add unnecessary costs and, in some cases, lead to delayed care.
• Proposed long-term contracts and strict supply chain requirements may create market rigidity, impacting the competitive landscape by discouraging some companies from entering or remaining in the market, and potentially reducing innovation.

To address these challenges, the healthcare system must balance beneficial consolidation and healthy competition. This requires coordinated efforts from legislative, regulatory, and industry leaders to create a competitive yet integrated healthcare landscape that promotes patient well-being and system efficiency.

Solutions

HLC remains committed to advancing policies and initiatives that promote healthy competition within the healthcare industry and market. By advocating for balanced antitrust regulations and thoughtful oversight, HLC aims to ensure that mergers and acquisitions contribute positively to the healthcare system.

Specific areas for policy action include:

• Influencing and encouraging regulators to consider the beneficial impacts of mergers and acquisitions alongside the potential harm associated with the transactions.
• Advocating for limiting ideologically-driven government action by avoiding additional regulatory requirements – focusing instead on balanced and predictable oversight.
• Empowering consumers and encouraging competition through clearer pricing.
• Ensuring that rural and underserved areas receive adequate support and investment.
• Tracking the effects of consolidation on workforce conditions and patient outcomes to inform future policy adjustments.