Isn't this exactly what Kaiser Permanente has done? Does Kaiser have the political clout to escape examination?
Doctor, Hospital Deals Probed
September 13, 2012
By ANNA WILDE MATHEWS
The Sacramento Bee/Associated Press
California's attorney general has launched a broad investigation into whether growing consolidation among hospitals and doctor groups is pushing up the price of medical care, reflecting increasing scrutiny by antitrust regulators of medical-provider deals.
The office of the attorney general, Kamala D. Harris, has sent subpoenas, known as civil investigative demands, to several big hospital operators in the state, including San Francisco-based Dignity Health and San Diego's Scripps Health and Sharp HealthCare. Northern California's 24-hospital Sutter Health system has also received one, as has Santa Barbara-based Cottage Health System, according to people with knowledge of the matter. Subpoenas have also gone to major California health insurers, those people said.
The probe, which has been under way for several months, is examining hospital systems' reimbursement from the insurers, according to people with knowledge of the matter. The regulator appears to be focusing on whether the systems' tie-ups with physicians, as well as ownership of hospitals, have given them the market power to boost prices in a way that violates antitrust law, these people said.
Nationally, health-care providers are rapidly merging into bigger health systems, moves that they say will improve efficiency. The number of hospital deals last year, 86, was the biggest since 2000, according to Irving Levin Associates, a research firm that tracks health-care transactions.
Also, nearly a quarter of all specialty physicians who see patients at hospitals are now employed by the hospitals, according to an estimate from the Advisory Board Co. ABCO +0.51% That is more than four times the 5% in 2000. Among primary-care doctors who see patients in hospitals, the employed share has doubled to about 40% in the same time frame.
The American Hospital Association said consolidation doesn't routinely drive up prices; the California Hospital Association referred questions to the national group. Hospitals are merging and employing more doctors in order to streamline and improve care, under pressure from health regulators urging a more integrated approach under the federal health overhaul law, said Melinda Hatton, AHA's general counsel. "The antitrust agencies and national health-care policy don't seem to be really in sync at this point," she said.
Some research suggests that mergers can drive up health-care prices. A 2010 study published in the journal Health Affairs said concentration among health-care providers in California had led to "a definite shift in negotiating strength toward providers, resulting in higher payment rates and premiums."...