A skeptic’s advice on antitrust regulation
Antitrust enforcement in health care has gotten tougher under President Joe Biden, with mixed results.
The Federal Trade Commission has prevented health care systems from becoming larger, while the Department of Justice unsuccessfully challenged insurer UnitedHealth Group’s purchase of health finance and billing data firm Change Healthcare.
Hal Andrews, CEO of health care analytics company Trilliant Health, thinks the regulators have it all wrong. In a chat with Ruth, Andrews suggested better ways to control costs than blocking mergers and acquisitions.
This interview was edited for length and clarity.
How should antitrust regulators handle health care?
I think a consent decree approach where you try to acknowledge that there is a fundamental capital and operating inefficiency that could be addressed with closing a facility and trade that for more access in impoverished neighborhoods.
So don’t oppose mergers and acquisitions?
Instead of blocking deals, I would be trying to get consent decrees where you say, “You can close that one, but I want you to build a 20,000-square-foot ambulatory medical facility with primary care imaging and stand up an emergency department. And in this market, you’ve got to build three of them. And we’re going to tell you where you have to build them.”
I think that’s a much better place than just to say: “No, you can’t do that.”
Do you agree with the federal court’s decision to allow UnitedHealth to acquire Change Healthcare?
United’s gonna do a billion a day in revenue. A billion. According to them, they employ or are affiliated with 65,000 physicians, which is 10 percent of the practicing physicians in the United States. So if that’s not an issue, I don’t know how anything else is.
The DOJ is looking at CVS’ purchase of home care company Signify Health. What do you think?
I think that’s a sillier pursuit. I don’t know that there’s anything more mom-and-pop than the home health industry, except for gas stations and liquor stores. I mean, they’re literally tens of thousands of home health operators. And I don’t know how Signify moves the needle on that. I just don’t understand how you could make an argument that you could influence the market or create anticompetitive situations.
As compared, can [UnitedHealth’s pharmacy benefit manager] Optum leverage the Change Healthcare data set in ways that hurt others? For sure.
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In 2020, private health insurers paid roughly the same amounts for virtual visits as they did for in-person visits, according to a new analysis from the Kaiser Family Foundation.
That finding could dampen enthusiasm among providers and insurers promoting telehealth as a cost-saving measure, the report says. But by using telehealth, it can be easier for patients to see their doctors.
In the pandemic’s early stages, the federal government expanded reimbursement for telehealth to help keep people out of the virus’ path, and private insurers followed suit, bolstering rates, the analysis said.
Most doctors were paid the same for telehealth and in-person visits, the researchers concluded after analyzing more than 76 million claims.
Payments were also similar for mental health therapy, whether virtual or not.
“We do not know at this point if private insurers continue to pay for telehealth in parity with in-person care,” the researchers said. “However, if telehealth payments continue to be the same as those for in-person care, then this raises questions as to whether telehealth will reduce the spending on common health services, as some have predicted.”
But the research on payment parity won’t surprise most employers. About two-thirds of company leaders already considered telehealth a wash financially, with just 4 percent expecting more telehealth use will raise costs, while 6 percent said they thought it would reduce them.
“The primary benefit to expanding telehealth may be increased access to services and convenience for enrollees,” the researchers wrote, adding that most employers think telemedicine will play a key role in bolstering access.
Amazon is launching a prescription subscription.The new service called RxPass allows Prime members for $5 per month to get eligible generic prescription medications. There are over 50 medications listed that treat some 80 conditions.
The new service competes with discount drug companies like Mark Cuban’s Cost Plus Drug Company and GoodRx, as well as online prescription delivery services from bigger pharmacy brands like CVS.
Online pharmacies have been around for years, but have so far failed to gain traction. Most people still go to their local pharmacist to pick up their medications. However, the pandemic accelerated the use of online prescription ordering and delivery.
Since 2018, Amazon has started several health care initiatives including a telehealth service, which has since shuttered. In the past few years, the company has acquired medication delivery and packaging service PillPack, health insurance guide Health Navigator, and offered to acquire primary care chain One Medical.
CORRECTION: An earlier version of this newsletter misstated the status of Amazon’s proposed acquisition of One Medical.
