The health insurance industry wants policymakers to require more transparency of private equity healthcare deals and increase oversight of health system consolidation, the trade group AHIP wrote in letters to President Joe Biden and congressional leaders Monday.
AHIP outlines policies it argues would 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 gaming the rules to their advantage and inadequate laws and enforcement to protect competitive markets,” AHIP wrote.
Increasing transparency into private equity acquisitions and how they affect quality is a step towards improving the system, AHIP said.
The value of private equity deals in healthcare nearly tripled between 2010 and 2019, reaching almost $ 120 billion. Private equity-backed hospitals charge higher prices than non-acquired hospitals and have lower staffing ratios, according to a study published in Health Affairs last year.
AHIP recommends Congress requires private equity companies and hedge funds to publicly report purchases of ambulance providers, emergency room physician practices and other specialty groups with low insurance network participation.
The group also asks the Health and Human Services Department to require hospitals in local markets with high private equity presences to report annually on their contracts with providers affiliated with those investors. The Government Accountability Office and the Federal Trade Commission should conduct studies on anti-competitive effects of private equity groups acquiring ambulance companies, emergency room physician practices and other specialties, AHIP wrote.
AHIP also points to consolidation among health systems, which it says leads to imbalances in contract negotiations between hospitals and insurers and calls on federal and state regulators to scrutinize contracts that restrict competition and lead to higher spending.
“Protecting patients, consumers, and businesses from overpaying for care. That means stopping anticompetitive behavior by health systems who use monopoly power to impose unreasonable contract terms that raise costs for everyone,” the AHIP letters say.
In 2020, Congress repealed insurers ‘immunity from federal antitrust enforcement, as insurers raked in profits from patients’ delayed medical care at the start of the COVID-19 pandemic.
AHIP additionally calls for greater competition in the pharmaceutical market, support for telehealth, expansion of home-based care and other policies.