Healthcare merger mania scrutinized on Capitol Hill as new deal combines major health systems

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Healthcare merger mania scrutinized on Capitol Hill as new deal combines major health systems
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Lawmakers are weighing options to boost industry competition and rein in costs for patients.

Healthcare-industry consolidation was in the spotlight Wednesday, with lawmakers and health-policy experts examining ways to boost competition and drive down patients’ costs — even as a major new health-system combination was announced.

Industry mergers are driving up healthcare costs without providing any clear improvements in the quality of care provided, several policy experts and lawmakers said at a hearing of the House Energy and Commerce Committee’s health subcommittee that was focused on reining in costs. “With this new approach, we aim to address healthcare affordability and improve outcomes,” Steve Shivinsky, spokesperson for Kaiser Permanente, told MarketWatch. Risant aims to respond to current pressures in the industry, including inflation, increased labor costs, and consolidation, “with a value-based care approach that improves quality while keeping the focus on the mission of these community-based hospital systems,” he said.

Nearly four in 10 Americans said they or a family member had postponed medical treatment in 2022 due to cost, according to a Gallup poll conducted late last year. That was the highest level in the 22 years that Gallup has been tracking the trend. The cost concerns aren’t limited to the uninsured: About one-third of insured adults worry about affording their monthly health-insurance premium, according to health-policy nonprofit KFF.

Concentration among pharmacy-benefit managers, or PBMs, which manage prescription-drug benefits on behalf of insurers, large employers and other payers, is also a concern, some lawmakers and policy experts said. About 80% of all prescription-drug claims are processed by three companies, the Energy and Commerce Committee’s Republican staff said in a memo prepared for the hearing, with vertical integration also a concern as PBMs acquire pharmacies.

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