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Executive Order Targets Hospital Consolidations & Price Transparency

President Biden's latest Executive Order issued on July 9, 2021 contains provisions to strengthen reviews of hospital consolidations and continuation of hospital price transparency requirements implemented in the prior administration. 

Consolidation: The order encourages FTC and DOJ to review and revise (e.g.., strengthen) existing merger guidelines so that patients aren't harm, citing that the 10 largest health systems now control approximately 25% of the market; that since 2010 139 rural hospitals have closed; and hospitals in consolidated markets charge a much higher price as compared to hospitals in more competitive markets. Right here in Memphis, the FTC filed a complaint and authorized a suit in federal court to block Methodist's acquisition of Saint Francis citing decreased market competition and the prediction of increased healthcare costs and the diminishment of incentives to expand services, invest in new technology, increase access to care, and focus on quality improvement. Methodist ultimately decided not to move forward with the acquisition. Click here to read the complaint.

Price Transparency:  Effective January 1, 2021, hospitals have been required to publicly report on their website a consumer-friendly list of negotiated prices with health insurance companies for 300 shoppable services as well as a machine-readable detailed listing of all negotiated prices.  The order directs HHS to support these existing requirements. Milliman reports that as of June 2021, approximately 61% of the hospitals had posted the machine-readable files; 33% had posted limited information; and 6% had posted nothing.  Even with these postings, however, much of the information is not presented in a "consumer-friendly" format and is difficult to find, analyze and understand by even the most sophisticated health journalists, as reported by Kaiser Health News. Although it has limitations, the data is shedding light on the variation in negotiated prices across payers within a hospital and across the market.  According the Milliman, the information ultimately can be used for

  • Collecting, transforming, and automating the collection of current and historical payer rates to determine trends
  • Analyzing market position relative to competing providers and payers
  • Comparing hospitals' weighted average reimbursement based on utilization distribution and payer mix
  • Developing direct-to-provider contracts for employers
  • Identifying the financial impact of network types and supporting negotiations
  • Assisting consumers to better understand the cost of healthcare services and episodes along with the impact of out-of-pocket costs

If you would like to see information for Memphis-area hospitals, please email [email protected]. Or, as recommended by KHN, don't hesitate to google the hospital name and "price transparency" and follow the links. 

Posted by Cristie Travis at 8:47 AM

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