Consolidation in the healthcare industry continues, however the Federal Trade Commission (FTC) is paying close attention (and not just to large health system mergers).  As Chilivis Grubman discussed previously, the FTC has been particularly active in the healthcare industry in 2020 and moving into 2021.  

On April 14, 2021, the FTC released a summary on its ongoing research into physician group and healthcare facility mergers. As explained by Michael G. Vita, the Deputy Director of Research and Management with the Bureau of Economics (BE), the FTC seeks to further understand how consolidation in physician and clinical services has affected competition. The FTC  announced the study in January, 2021, alongside orders to six insurance companies to provide information to allow for the FTC’s retrospective review. 

Notably, this study focuses on physician group and outpatient facility consolidation, but not inpatient hospital facility mergers (as was the focus of eight prior studies).  This shift is one of many signals from the FTC indicating an increased focus on physician group mergers. 

The current project includes a retrospective review of claims data received from six insurance companies (Aetna, Anthem, Cigna, Florida Blue, Health Care Service Corporation, and United Healthcare) across fifteen states (including Georgia), regarding certain physician group and healthcare facility mergers that occurred between 2015 and 2020.

Specifically, the FTC’s project aims to examine the following through analysis of the acquisition of physician practices by hospitals and mergers of multi-specialty physician practices: 

  • How horizontal mergers have affected provider prices and whether price effects have been more pronounced for mergers involving certain medical specialties;
  • How horizontal mergers affect non-price outcomes, including health outcomes for patients of merged providers; and
  • How vertical mergers in provider markets have affected competition.

Separately, the project will also review horizontal non-inpatient healthcare facility mergers between competing healthcare facilities (such as imaging or dialysis centers), to evaluate how such mergers impact prices paid by commercial payers, patient outcomes, and measurable efficiencies. 

The summary did not provide an expected date for the results of the study, though it is expected to take several years to complete and the BE intends to release a series of research papers throughout the course of the study. 

The attorneys at Chilivis Grubman assist businesses of all types and sizes in connection with mergers and acquisitions in the healthcare arena.  If you need assistance with such a matter, please contact us today.