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3 things could increase competition, change healthcare pricing, says economic expert

Doctor Martin Gaynor testifies before Congress about hospital consolidation and he suggests three things that could help the issue
Posted at 4:09 PM, May 08, 2020
and last updated 2020-05-08 19:34:44-04

CLEVELAND — Our medical environment has changed with the coronavirus. But, even before that, in Cleveland it was already altered over the past 20 years with the considerable consolidation of hospitals by major health systems.

RELATED: The Rebound: Recovering from a pandemic after years of hospital growth and ownership consolidation

“If (non-profit hospitals) have the opportunity to take advantage of market power and get higher prices, they do it,” said Dr. Martin Gaynor from Carnegie Mellon University. He’s studied consolidation issues for the past four decades.

“Quality is sub-optimal,” he said during his testimony last year during Congressional hearings about hospital consolidation. “Prices are high and rising. There are egregious pricing practices.”

He’s suggested three things to help increase competition in healthcare, and improve treatment and pricing.

One: “Get rid of regulations that make it hard for competition to occur,” he told us. He said laws that expand what nurse practitioners and pharmacists can perform are good steps. “Such that those people can do what they’re trained to do and aren’t unnecessarily limited,” said Dr. Gaynor. “We’re actually seeing some action on a couple of these things right now…the crisis has led to this because it’s all hands on deck.”

Two: Create an agency to monitor oversight and intervention in healthcare. It would have access to a national data warehouse of private and public health plans. “To assess what’s going on. What’s happening with prices? What’s happening with quality? What’s happening with accessibility?” Dr. Gaynor explained.

Three: Strengthen anti-trust enforcement. He said enforcement budgets have not seen increases in a long time. “In fact, after you adjust for inflation, their budgets are falling at the same time as mergers in the entire economy have been increasing,” he told us.

In light of the current day, with distancing in place, Ohio Governor Mike DeWine has said one of the lessons of the pandemic is that no matter if you’re Republican or Democrat, there’s going to be a coming together — a down-the-middle consensus. “We’ve got to focus a lot more on public health,” said Gov. DeWine. “We’ve got to fund consistently, year after year, public health.”

Cleveland Clinic and University Hospitals have said consolidation helps improve care. Here are their recent statements to News 5:

“Our ultimate goal is to improve the overall health of the communities we serve. We continue to grow so that we can care for more patients and improve their outcomes. By sharing best practices and standardized care over a broader landscape, the care we deliver across all locations is consistent. We know that high volume medical centers can produce better outcomes for many procedures, and more effectively and efficiently provide care across a whole spectrum of services. At the same time, we know there is no one-size-fits-all approach to healthcare. Each of our locations has a culture, and each community we serve has unique needs. Acknowledging this diversity makes Cleveland Clinic stronger and able to adapt to change. As hospitals have joined the Cleveland Clinic health system, their quality and safety have consistently improved. Akron General and Union Hospital, two hospitals that joined within the last few years, received an “A” in the most recently published safety grades by the Leapfrog Group—a national nonprofit organization that measures the quality and safety of American healthcare. Operating as a hospital system we’re able to leverage shared resources and efficiencies. Without sufficient scale, it is difficult to address future healthcare initiatives such as access, infrastructure, sophisticated HIT, affordability/costs, insurance plan coverage and more.” -Cleveland Clinic

“The COVID pandemic has highlighted an important benefit that results from having a comprehensive and coordinated network of hospitals working together as a unified system. University Hospitals has been able to bring to bear the expertise and assets of our academic medical center, 18 hospitals and more than 50 outpatient facilities in caring for communities across Northeast Ohio. Community hospitals that chose to join the UH system have benefitted from multi-million dollar investments to enhance facilities and equipment and expand access to highest-quality specialty care close to home, such as services delivered by the UH Seidman Cancer Center and the UH Harrington Heart and Vascular Institute. As a health system, UH is able to deliver care more efficiently. In serving Medicare and Medicaid patients, UH works as a responsible partner with the state and federal governments to seek ways of lowering costs while improving quality of care. At UH, all patients are treated with respect, regardless of their individual financial circumstances, and no one is denied or delayed emergency or medically necessary care because of his or her inability to pay for services. If patients meet established financial eligibility requirements, their bill for emergency medical or medically necessary care at a UH hospital facility may be discounted under the UH Financial Assistance Program. More information on billing and insurance services at UH can be found: https://www.uhhospitals.org/patients-and-visitors/billing-insurance-and-medical-records [uhhospitals.org] -University Hospitals