Letter Continues Oversight Work to Examine Cost Drivers of Health Care
WASHINGTON, DC – Energy and Commerce Committee leaders today sent a letter to the Medicare Payment Advisory Commission (MedPAC) requesting they conduct additional research looking at questions pertaining to hospital consolidation and the financial impact it has on Medicare patients and the program.
“Through its public hearings, the committee has heard differing views from experts on the extent to which consolidation is a cost driver in the Medicare program and the degree to which payment policies of the Medicare program encourage such consolidation,” write Walden, Burgess, and Harper. “Some have questioned the merit of concerns over consolidation and have instead highlighted the beneficial efficiencies and economies of scale that can be accomplished through consolidation. For example, in testimony before the Energy and Commerce Health Subcommittee on May 21, 2014, during a hearing entitled ‘Keeping the Promise: Site-of-Service Medicare Payment Reforms,’ which examined various site-neutral prospective policy changes, one witness argued that site-neutral payment policies could not be viewed in a vacuum and instead must be viewed along with the totality of services provided, populations served and recognizing that ‘hospitals are subject to significant regulatory and quality requirements.’”
The leaders continued, “However, other witnesses have made data-driven arguments that much hospital consolidation can increase spending for the program and patients. For example, on February 14, 2018, the Oversight and Investigations Subcommittee of the Committee on Energy and Commerce held a hearing on consolidation in the health care industry. One witness highlighted how ‘extensive research evidence shows that consolidation between close competitors leads to substantial price increases for hospitals, insurers, and physicians, without offsetting gains in improved quality or enhanced efficiency.’ The witness noted that ‘evidence shows that patient quality of care suffers from lack of competition’ and suggested ‘policies are needed to support and promote competition in health care markets [which] includes policies to strengthen choice and competition, and ending distortions that unintentionally incentivize consolidation.’”
Posing a series of questions, the leaders wrote, “The committee wishes to determine the impact consolidation has on patients, and if patients end up paying higher prices due to consolidation for no identifiable benefit to the beneficiary.”
Click HERE to read the letter.