Industry defends health care mergers

Presented by HCA Healthcare: Delivered daily by 10 a.m., Pulse examines the latest news in health care politics and policy.
Jun 11, 2024 View in browser
 
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By Ben Leonard and Chelsea Cirruzzo

Presented by 

HCA Healthcare

With Daniel Payne

Driving The Day

A patient is wheeled down a hospital hallway. | Getty Images

Mergers in the health care industry are being scrutinized by lawmakers. | Getty Images

PUSHBACK TO MERGER SCRUTINY — Hospitals, insurers and private equity firms are making the case that health care consolidation can benefit the sector amid growing bipartisan scrutiny of the practice.

Democrats and Republicans on Capitol Hill have railed against the uptick in consolidation, saying it has led to rising costs for patients, especially with respect to hospital mergers; large firms acquiring physician practices; consolidation of pharmacy benefit managers, which negotiate prescription drug programs for insurers; and private equity’s purchases of nursing homes.

Lawmakers have pushed for transparency measures and changes to payment for hospitals that could disincentive them from buying doctors’ practices, and legislation could be included in an end-of-year package.

Evidence shows that consolidation has led to higher prices in some areas, but its impact on quality is less clear.

The Justice Department, HHS and the FTC requested information from the public in March on the potential effects of such transactions, raising concern that they could impede competition — and thus affordability, innovation and quality of care. The comment deadline closed late last week.

The resistance: Organizations representing hospitals, insurers, long-term care facilities and private equity groups have made the case that consolidation in some areas can promote efficiency and quality of care in comments obtained by Pulse.

Insurer lobbying group AHIP said consolidation among health plans is unlikely to increase spending and could bolster efficiency and quality since they compete with national and regional insurers. AHIP also said rural hospital mergers with larger systems keep facilities open that might otherwise shutter.

The Federation of American Hospitals said the Covid-19 pandemic and the Change Healthcare cyberattack disrupting payments across the sector showed consolidation’s benefits. They said larger, integrated hospitals and systems were better able to adapt to the pandemic and the payment crisis.

Long-term care industry group AHCA/NCAL said that transactions with “related parties” — entities that have shared control — can create efficiencies, for example, by hiring a regional nurse to work at multiple facilities. Related party transactions have come under fire for potentially obscuring profits — which the industry has denied is commonplace.

The American Investment Council, a private equity lobbying group, said that privacy equity creates efficiencies for patients, providers and employees and the agencies are “unfairly targeting” private equity.

PBM lobbying group PCMA didn’t respond to the agencies’ request, but spokesperson Greg Lopes said the PBM marketplace is “diverse and competitive.”

The resistance to the resistance: A wide range of groups, including National Nurses United, the National Association of Chain Drug Stores, PhRMA and Arnold Ventures, hammered consolidation across the sector.

“Large, consolidated health systems implement policies that harm workers and patients,” the nursing union wrote.

WELCOME TO TUESDAY PULSE. I am a big fan of Ama, the new Italian spot in Navy Yard (walkable from the Hill) and would recommend it. Reach us and send us your tips, news and scoops at bleonard@politico.com or ccirruzzo@politico.com. Follow along @_BenLeonard_ and @ChelseaCirruzzo.

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In Congress

The U.S. Capitol Building

Health care appropriations bills are on the agenda this week on Capitol Hill. | Anna Moneymaker/Getty Images

WHAT TO WATCH THIS WEEK — Congress has a busy week in health care, with appropriations bills on the move in the House and a vote on in vitro fertilization legislation expected in the Senate.

Here’s what we’re watching on Capitol Hill this week:

A House Appropriations subcommittee meets today to mark up a spending bill including FDA funding for fiscal 2025.

The House Appropriations Committee meets Wednesday to mark up the funding bill for the State Department, Foreign Operations and other programs. The legislation would ban all organizations receiving U.S. global health funding from promoting, referring or performing abortions with funding from other sources.

The House Energy and Commerce Committee meets Wednesday to mark up 13 bills but not legislation that would extend eased telehealth rules for two years as previously expected. That bill advanced through the health subcommittee in a 41-0 vote last month. The bill hasn’t received a public Congressional Budget Office score yet.

The Senate Judiciary Committee meets Wednesday to discuss “enhancing enforcement against illegal e-cigarettes.”

The Senate Finance Committee meets Wednesday to examine issues at youth residential treatment facilities and potential solutions.

 The House Natural Resources Committee meets Wednesday to mark up legislation that would require the Interior Department to consult HHS on decisions about critical minerals and materials that could impact health care.

A Senate Judiciary subcommittee meets Wednesday to discuss abortion bans and people crossing state lines for reproductive care after the Dobbs decision. 

The House Budget Committee meets Thursday to examine the Medicare program’s solvency.

A House Energy and Commerce subcommittee meets Thursday to examine the state of the Center for Medicare and Medicaid Innovation, which was created to try new ways to finance health care but has increased spending. CMMI head Liz Fowler will testify.

KEY NDAA AMENDMENTS TO WATCH — The House is set to vote on its version of the National Defense Authorization Act this week, and plenty of potential provisions have health care implications, even outside of contentious anti-abortion riders that are unlikely to become law.

The legislation is set to be considered by the House Rules Committee today before a floor vote later this week, and lawmakers will attempt to add amendments to one of the few potential major legislative packages remaining this Congress.

One of the most notable amendments of the more than 1,300 filed that lawmakers will consider is a bipartisan one from Rep. Brad Wenstrup (R-Ohio) that would attach legislation known as the BIOSECURE Act, which would effectively prevent China-based biotech companies from doing business in the U.S.

The legislation has significant momentum after versions advanced out of the House Oversight Committee in a 40-1 vote last month and out of the Senate Homeland Security Committee earlier this year.

Other noteworthy bipartisan amendments include bills that would:  

Allow VA providers to recommend state medical marijuana programs. A similar amendment was added to the House-passed VA spending bill last week. Another NDAA amendment would allow members of the Armed Forces to use legal hemp.

Prevent foreign adversaries from “exploiting” U.S. artificial intelligence. The bill passed the House Foreign Affairs Committee in an overwhelming vote last month.

Bar the Defense Department from using funds on research using dogs or cats.

Mandate the Department of Homeland Security to craft a strategy to counter cartel recruitment on social media.

On the horizon: Even if the amendments were added to the package, the Senate must still agree to adopt them in the final negotiated version.

 

THE GOLD STANDARD OF HEALTHCARE POLICY REPORTING & INTELLIGENCE: POLITICO has more than 500 journalists delivering unrivaled reporting and illuminating the policy and regulatory landscape for those who need to know what’s next. Throughout the election and the legislative and regulatory pushes that will follow, POLITICO Pro is indispensable to those who need to make informed decisions fast. The Pro platform dives deeper into critical and quickly evolving sectors and industries, like healthcare, equipping policymakers and those who shape legislation and regulation with essential news and intelligence from the world’s best politics and policy journalists.

Our newsroom is deeper, more experienced and better sourced than any other. Our healthcare reporting team—including Alice Miranda Ollstein, Megan Messerly and Robert King—is embedded with the market-moving legislative committees and agencies in Washington and across states, delivering unparalleled coverage of health policy and the healthcare industry. We bring subscribers inside the conversations that determine policy outcomes and the future of industries, providing insight that cannot be found anywhere else. Get the premier news and policy intelligence service, SUBSCRIBE TO POLITICO PRO TODAY.

 
 
SAVE THE DATE

JOIN US: TRANSFORMING HEALTH CARE — POLITICO is convening a panel of lawmakers, officials and experts Thursday at 5:30 p.m. at AutoShop in Washington to discuss potential policies to bolster access to new technologies and therapies.

You can learn more about the event and register here.

 

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Abortion

GOP RETREATS ON ABORTION RIDERS — The House’s version of the spending package that includes the FDA doesn’t contain abortion-related riders, a concession to swing-district Republicans, POLITICO’s Jennifer Scholtes reports.

Unlike last year, the legislation didn’t contain provisions to overturn the FDA’s move allowing abortion pills to be sold at retail pharmacies and delivered by mail, riders that tanked passage attempts in the previous funding cycle. Still, conservatives could add amendments, even if the riders aren’t included in the initial bill.

The totals: The package includes $25.87 billion in discretionary funding, $355 million below fiscal 2024 enacted levels and $2.69 billion less than the Biden administration’s request. The House and Senate will ultimately have to reach a bipartisan agreement to reconcile their spending packages. House Democrats slammed the proposal, saying the funding levels are “irresponsible.”

Providers

AMA CALLS FOR PEACE (BUT NOT CEASE-FIRE) — CHICAGO – The American Medical Association’s House of Delegates passed a resolution at its annual meeting here on Monday calling for “peace in Israel and Palestine,” Daniel reports.

It’s another instance of one of the most powerful medical groups in the country looking to thread a political needle as it seeks more pay from Washington in the Medicare program.

More than 86 percent of the group, made up of doctors across specialties and geographies, voted for the resolution.

But that didn’t come without a fight. Some members sought to delay a decision on the proposal or substitute “Gaza” for “Palestine.” Both efforts failed.

Others proposed an amendment that would have called for a “ceasefire,” arguing that it is necessary for peace. That amendment, like other efforts to specifically support a cease-fire, ultimately failed, with 69 percent of delegates voting against it.

 

JOIN US ON 6/13 FOR A TALK ON THE FUTURE OF HEALTH CARE: As Congress and the White House work to strengthen health care affordability and access, innovative technologies and treatments are increasingly important for patient health and lower costs. What barriers are appearing as new tech emerges? Is the Medicare payment process keeping up with new technologies and procedures? Join us on June 13 as POLITICO convenes a panel of lawmakers, officials and experts to discuss what policy solutions could expand access to innovative therapies and tech. REGISTER HERE.

 
 
Names in the News

Angie Boliver, previously of AB Communications Strategies, has been named CEO of the Healthcare Supply Chain Association. She succeeds Todd Ebert, who retired after seven years.

Charles “Chuck” Divita III has been appointed CEO of Teladoc and joined the company’s board. He was previously an executive at GuideWell.

A message from HCA Healthcare:

Imagine the hospital of the future. What will it look like? How will we use technology to provide the best possible patient experience? HCA Healthcare visionary innovators and providers ask these very questions each day.

At HCA Healthcare, we are grateful for the responsibility we have as a leading healthcare system to show up and advance patient care. Our Care Transformation and Innovation (CT&I) team is revolutionizing the future of patient-centered care by solving longstanding industry challenges in healthcare through clinically led integration of technology into care. We leverage our clinicians, data, machine learning and more, always innovating to create better healthcare outcomes and experiences for our patients and care team members.

Learn more about how HCA Healthcare is building on a legacy of innovation to deliver cutting-edge healthcare solutions.

 
WHAT WE'RE READING

Healthcare Dive reports on the potential impact of Humana and CVS downsizing their Medicare Advantage plans.

Chelsea reports on the federal law enforcement unit set to crack down on illegal e-cigarettes.

POLITICO’s Adam Wren, Megan Messerly and Lisa Kashinsky report on Trump being hit by his supporters on abortion.

 

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