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For hospitals and physicians, this article and this type of
regulatory attention means renewed attention to assessing the
antitrust aspects of consolidation efforts. It also serves as a
quick reminder to review closely the Stark Law and Anti-Kickback
Statute aspects of consolidation efforts.
After increased scrutiny from antitrust regulators,
California's attorney general sent subpoenas to several big
hospital operators in the state, including San Francisco-based
Dignity Health and San Diego's Scripps Health and Sharp
HealthCare, to investigate whether growing consolidation among
hospitals and doctor groups is increasing the price of medical
care. Although specifics of the inquiry are not known, the probe,
which has been underway for several months, examines hospital
systems' reimbursement from the insurers and seems to focus on
whether the systems are given increased market power from ownership
of hospitals and coalition with physicians in a way that violates
antitrust law.
Debate exists as to whether consolidation of hospital systems
with physician groups does indeed increase medical costs. The
American Hospital Association contends that such mergers do not
consistently drive up medical costs and that increased prices can
be attributed to various factors. A study published in the journal
Health Affairs, however, suggests otherwise
, noting that such
mergers lead to a "shift in negotiating strength toward
providers, resulting in higher payment rates and
premiums."
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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