The American Hospital Association (AHA), on behalf of its nearly 5,000 members and clinician partners, recently responded to the federal antitrust agencies’ request for comments to help inform the agencies’ efforts to “modernize” the 2010 Horizontal Merger Guidelines and the 2020 Vertical Merger Guidelines (collectively, “Merger Guidelines”). According to the AHA, rather than needing major revisions, the Merger Guidelines should be “recalibrated . . . to account for significant developments in antitrust law and economics . . . .”
In particular, the AHA believes the Merger Guidelines should account for and incorporate recent scholarship demonstrating that hospital mergers can benefit patients and payers. The AHA cited a recent report by consulting firm Charles River Associates confirming that hospital acquisitions can generate substantial benefits and reduce costs by, among other things, “increasing hospital scale, standardizing clinical practices, reducing hospitals’ cost of capital and allowing hospitals to avoid duplicative capital expenditures.”
In addition, the AHA described what it argues are defects in current economic models that incorrectly predict the effects of hospital mergers on consumers. The AHA pointed out that both the “upward pricing pressure” and the “willingness to pay” models have significant flaws resulting in ineffective and inaccurate merger reviews of hospital transactions.
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