Dive Brief:

• In response to a request for public feedback from antitrust regulators, the American Hospital Association said merger guidelines used to detect and analyze unlawful mergers "do not need major revisions."
• AHA advised against changing the guidelines "too often or too dramatically," saying adding rapid changes would be destabilizing as hospitals and health systems evaluate ongoing mergers that can take a year to iron out, in a letter sent to regulators Wednesday.
• Instead of any major changes, the antitrust agencies should do more with the power they currently have and challenge "anticompetitive mergers and deceptive conduct by insurance companies," AHA said, referring to UnitedHealth's buy of Change Healthcare.

Dive Insight:

Antitrust regulators are looking to modernize merger guidelines, which have not been updated in more than a decade, as the Biden administration increasingly cracks down on consolidation.

At the beginning of the year, the Federal Trade Commission and the Department of Justice called on the public to submit feedback as it begins its review of the guidelines. The letter submitted by the hospital lobby is in response to that call.

Merger guidelines are an important tool in policing potentially unlawful tie-ups, and they also give important guidance to the courts on how to analyze such deals.

The Biden administration has taken a tough stance on mergers and acquisitions. Last summer the president called on the DOJ and the FTC "to enforce the antitrust laws vigorously," calling out the healthcare industry specifically.

In an executive order, Biden instructed antitrust regulators to "review and revise" merger guidelines to make certain patients go unscathed.

The healthcare industry has consolidated at a steady clip, raising concerns about quality and cost to patients. Research shows that hospital mergers do not result in improved quality and lead to higher prices. 

Legislators have been increasingly interested in hospital consolidation. In a Senate subcommittee hearing held last year, Martin Gaynor, an economics professor at Carnegie Mellon University said, "hospitals that face less competition charge higher prices to private payers, without accompanying gains in efficiency or quality." He added, "the evidence also shows that lack of competition can cause serious harm to the quality of care received by patients, even substantially increasing the risk of death."

AHA said their member hospitals and health systems continue to face a number of issues each day, including COVID-19.

"Mergers are a vital tool that help hospitals address these challenges," AHA said. "For these reasons, the AHA urges that the antitrust agencies update the merger guidelines to properly recognize the benefits that hospital mergers produce."

The FTC is fresh off two wins challenging separate hospital mergers in New Jersey and Rhode Island.

Most recently, a federal appeals court blocked a tie-up between Hackensack Meridian Health, the state's largest health system, and Englewood Hospital, one of the last independent hospitals in the area, affirming a lower court ruling.

The win follows a victory in Rhode Island where the state's two largest health systems have abandoned plans to merge after a legal challenge was brought by the FTC and the state's attorney general.