Today, the Biden White House issued a wide-ranging Executive Order ordering his agencies to prioritize economic competition in a number of industries, including health care. In particular, the order directs HHS Secretary Becerra to “support existing price transparency initiatives for hospitals, other providers, and insurers along with any new price transparency initiatives or changes made necessary by the No Surprises Act (Public Law 116-260, 134 Stat. 2758) or any other statutes.” This policy essentially tells the Health Care Swamp – industry lobbyists that have been fiercely pressuring the new administration to retreat from the Trump-era rules requiring hospitals to show their secret prices – to pound sand. Between this and the absolute smack-down the hospitals received in the federal district and appellate courts after they sued Trump over the rules, patients, employers, unions, taxpayers – the true payers of health care – have a reason to celebrate.
The only disappointment with respect to price transparency with the Executive Order is that Team Biden passed on the opportunity to toughen up the laughably negligible penalties against hospitals for noncompliance in the Trump rules – a mere $300 per day of noncompliance. This defect in the Trump rule is responsible for the broad noncompliance with the rule, across the industry. Our hope at AllBetter is that Biden’s intention, as signaled in this Order, will communicate to hospitals that compliance is a non-negotiable going forward.
The other important policy in the Executive Order relates to antitrust enforcement against market consolidation in health care. “Consolidation” means hospitals eating other hospitals, as well as outpatient facilities and physician practices, such that a single, giant corporate hospital system owns the vast majority of providers in a region. This predatory behavior consistently drives up prices and lowers quality whenever it’s tried, as you would expect in a monopoly situation. It also ruins quality of life for health care practitioners who are bought out by corporate masters – usually under duress of not being able to compete against the dominant system – and who are forced to comply with revenue-seeking dictates that turn them into high-priced referral factories that engage in predatory billing, upcoding, and inappropriate care.
For too long, the federal antitrust enforcers – the DOJ Antitrust Division and the Federal Trade Commission (FTC) – have pointed fingers at each other as to why they haven’t taken on these monopolistic predations by corporate hospital systems. One would say they only have jurisdiction over for-profit hospitals (most of these systems are “nonprofit,” so-called). The other would say that they only have jurisdiction over horizontal mergers (hospitals eating other hospitals) rather than the vertical mergers (hospitals eating all the non-hospital facilities and physician practices in the area) that are quietly, but quickly ending competition for care. The Biden Order directs DOJ and FTC to essentially get their acts together, coordinate and cooperate and take down these monopolies, posthaste. Time will tell if this type of top-down direction will overcome the bureaucratic inertia that has prevented these agencies from acting aggressively in the past.
The other question is – is it too late? Are markets already so hopelessly consolidated that the only solution is for self-funded employers to individually bypass the giant systems by building their own networks of independent physicians, facilities and just keeping patients out of the hospitals as much as possible? That’s what AllBetter does and it saves employers 20-40% in the first year – in spite of the consolidation in any given market.