Health

Insurance lobby calls for greater oversight of private equity transactions

health insurance industry wants politicians to demand more transparency from private capital healthcare deals and increase oversight from health system consolidation, trade group AHIP wrote in letters to President Joe Biden and congressional leaders on Monday.
AHIP describes policies that it believes will improve competition in the healthcare system and reduce costs. “In too many segments of our healthcare system, competition has been stymied by powerful healthcare providers and drug manufacturers using rules to their advantage and inadequate laws and enforcement to protect competitive markets,” writes AHIP.

Increasing transparency about private equity acquisitions and how they affect quality is a step towards improving the system, AHIP says.

From 2010 to 2019, the value of healthcare private equity transactions almost tripled, reaching nearly $120 billion. Privately backed hospitals charge higher prices than non-acquired hospitals and have lower staffing rates, according to a study published in the journal Health Affairs last year.

AHIP recommends that Congress require private equity firms and hedge funds to publicly report purchases of ambulance providers, emergency room physicians, and other specialized groups with low insurance network participation.

The group is also asking the Department of Health and Human Services to require hospitals in local markets with large amounts of direct investment to report annually on their contracts with providers associated with these investors. AHIP writes that the Government Accountability Office and the Federal Trade Commission should conduct studies on the anticompetitive effects of private equity group acquisitions of ambulance companies, emergency physician practices and other specialties.

AHIP also points to health systems consolidation, which it says is unbalancing contract negotiations between hospitals and insurers, and urges federal and state regulators to scrutinize contracts that limit competition and increase costs.

“Protecting patients, consumers and businesses from overpaying for treatment. This means an end to the anti-competitive behavior of healthcare systems that use monopoly power to impose unreasonable contract terms that drive up costs for everyone,” the AHIP letters say.

In 2020, Congress lifted insurers’ immunity from federal antitrust laws as insurers profited from delayed patient care early in the COVID-19 pandemic.

AHIP also calls for increased competition in the pharmaceutical market, support for telehealth, increased home care, and other policies.


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