Mixed feelings as lawmakers debate healthcare competition post-Obamacare

Legislators on Thursday were split on the Affordable Care Act's effect on provider and payer competition in the healthcare marketplace in the the first of several hearings to be held by the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law.

Members and those who testified were divided on whether enactment of the ACA in 2010 has caused the dramatic increase in the number of mergers and acquisitions among providers and payers, and whether the M&A provides better quality healthcare or result in higher prices due to a lack of competition.

[Also: Anthem to buy Cigna for $54 billion]

"Obamacare is another government experiment of attempting to replace the will of the market with its own, an experiment in my view that's gone horribly wrong," said Subcommittee Chairman Rep. Tom Marino, R-Penn. "I believe we have a duty to ensure that the laws Congress pass are encouraging competition and that the antitrust laws are being enforced effectively."

Hospital mergers have nearly doubled between 2009 and 2013, according to Merino.

Four of five largest health insurers in the country intend to merge, which will be the subject of separate upcoming hearings, he said.

American Hospital Association President Richard Pollack spoke against the mergers of Anthem/Cigna and Aetna/Humana. The deals would eliminate two of the nation's largest health insurance companies, leaving three dominant providers, he said.

[Also: Aetna buys Humana for $37 billion in largest-ever insurance merger]

"Those deals appear motivated by top-line profits," Pollack said. "The two deals promise fewer choices for consumers for commercial insurance and Medicare Advantage plans, narrower networks of providers in what few choices remain, and higher premiums and/or out-of-pocket costs, among other things."

Even if these insurers make good on their promise to reduce costs, he said, they have a "dismal track record" of passing any of those benefits on to consumers.

Hospitals have done the hard work of reducing readmissions, improving patient quality, experimenting with accountable care organizations and bundling programs, instituting population health programs, while insurers have sat on the sidelines, he said.

Anthem's Blue Cross and Blue Shield system is particularly troubling, said Pollack, who recommended the federal government take a look at how this acquisition could increase Blue plan dominance nationwide.

Dan Durham, executive vice president of strategic initiatives at America's Health Insurance Plans, said since the ACA established exchanges an average of 40 plan options are available per county in 2015, up from an average of 30 plan options per county last year.

Scott Gottlieb, MD, a resident fellow with the American Enterprise Institute, disagreed, saying that while there are a number of new plans, there's been a net loss of insurer carriers since the ACA and no new insurance company formations since 2008.

Gottlieb spoke of his concern for the loss of independent physician practices as they are being bought out by hospitals.

Physicians who join hospitals are reimbursed at a higher rate from Medicare than those who remain independent.

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Barbara McAneny, MD, who is on the AMA Board of Trustees, said it's difficult for individual physicians to compete with hospital- based physicians because they have the leverage to negotiate with insurance companies. Hospitals are also able to purchase supplies at a lower price, she said.

McAneny said one of her major concerns is dealing with insurers over drug availability and pricing.

"If a certain drug is indicated, you have to go to the insurance company to convince them to provide the medication," she said. If an insurance company is small and needs her business, they will listen to her, she said. It's more difficult dealing with a national network, and insurance consolidation will exacerbate that, she said.

Thomas Greaney, Professor of Law at St. Louis University said blaming the ACA for consolidation is misleading. The ACA promotes competition, he said.

Twitter: @SusanMorseHFN