Healthcare workers warn of the harms of consolidation

Healthcare workers, researchers and observers warned federal regulators during a public listening session Wednesday that consolidation harms employees and patients.

The Federal Trade Commission and Justice Department asked for input as they rework their horizontal and vertical merger guidelines. Most speakers claimed that mergers and acquisitions involving hospitals, physicians, pharmacy benefit managers and insurers have increased prices, stifled wages and reduced care quality.

“One thing that we often hear from hospital executives that are trying to get their deal through is that the merger will be efficient, it will lower costs and let them improve quality,” FTC Chair Lina Kahn said after hearing commentary from nurses, physicians, pharmacists and patients. “As we’ve heard from several of you, sometimes that cost cutting can come at the expense of quality of care.”

Regulators have been closely looking at how consolidation impacts the labor markets, Kahn added, noting that mergers and acquisitions have allowed employers to dictate wages and degrade working conditions. The public comment period ends April 21.

Here are five takeaways from the session:

1. A nurse alleged HCA Healthcare cut services, reduced staff and increased prices after it acquired Mission Health in 2019. HCA closed primary care clinics, rural cancer facilities and other specialty clinics and hiked prices 10% after the transaction, said Kelley Tyler, a nurse at Mission Hospital in Asheville, N.C. Meanwhile, nurse-to-patient staffing ratios increased from about 1-to-2 to up to 1-to-7, leaving only eight minutes to spend with each patient, Tyler said. “We believe HCA uses its monopoly power over western North Carolina to get control of its healthcare system then send it back to Wall Street and its shareholders,” Tyler said during the session, adding that HCA also owns supply chain companies, debt collection firms and a nursing school. “How can a corporation be allowed to influence and control all aspects of healthcare?” HCA did not immediately return requests for comment.
2. ScionHealth, which was formed last year after LifePoint Health and Kindred Health merged, has cut Lewiston, Idaho-based St. Joseph Regional Medical Center employees’ benefits, said Joe Thon, a nurse at St. Joseph. Their healthcare coverage network narrowed while premiums shot up, he said. Management also cut sick pay and retirement benefits, Thon said. Outsourcing of certain pharmacy services have added to nurses’ workloads and hurt patient care, he said. “Our hospital has lost so many employees that we have had an entire unit shut down for almost two years,” Thon said. LifePoint responded but did not have a statement prior to publication.
3. Mergers and acquisitions saved hospitals from closing during the COVID-19 pandemic, said Lisa Goldstein, senior vice president at Kaufman Hall. Being part of a larger health system enabled small, rural and mid-sized hospitals to gain access to personal protective equipment, ventilators and staff, she said. Small hospitals may not have the resources to address issues like the social determinants of health, Goldstein said. “Without being part of a larger system, smaller hospitals will face closures or bankruptcies because of the inability to absorb very large and permanent labor cost increases, recruit the future workforce and clinicians and treat an aging population,” she said.
4. Consolidation tends to disproportionately impact people of color and lower-income communities, said Lois Utley, senior advisor for the Hospital Equity and Accountability Project. Health systems use mergers to expand into predominantly white, suburban areas with high concentrations of commercially insured patients while abandoning hospitals in urban and rural communities of color, she said. They also tend to downsize or close maternity units, emergency departments and other money-losing service lines, Utley said. “The consequences of these actions have been starkly exposed by the COVID-19 pandemic, which found that Black, Latinx and indigenous people have had a harder time finding care in their own communities,” she said.
5. The consolidation among the three biggest pharmacy benefit managers and insurers has reduced access to the lowest-cost drugs, said Dr. Madelaine Feldman, a rheumatologist in New Orleans. PBMs often favor the highest-cost options for rheumatoid arthritis drugs by taking generic alternatives off their formularies, she said. “Now that the big three PBMs merged with some of the largest health insurance companies, we have an oligopoly that has resulted in a broken system, rife with conflicts of interest,” Feldman said. “This has created a huge black box that PBMs protect with high premiums and drug prices if anyone tries to draw back the curtain.” The Pharmaceutical Care Management Association, which represents PBMs, responded by claiming that PBMs offer $10 in savings for every $1 spent on PBM services in the form of negotiated discounts and rebates, 99.6% of which are passed on to patients and employers.