by Robert King | Jul 12, 2021
Providers are calling President Joe Biden’s executive order to ratchet up scrutiny of hospital mergers and noncompete clauses as misplaced and adding bureaucratic red tape to merger agreements.
Biden’s order, released Friday, calls on the Federal Trade Commission (FTC) and the Department of Justice to review hospital mergers to ensure they do not harm quality and raise prices. The order is the latest scrutiny from the federal government over mergers and acquisitions in the industry.
Hospital groups said the order could add more bureaucratic red tape to mergers that are already scrutinized.
“It is important to stress that hospital mergers and acquisitions undergo an enormous amount of rigorous scrutiny from the federal antitrust agencies and state attorneys general,” said Rick Pollack, president and CEO of the American Hospital Association (AHA), in a statement Friday.
AHA also noted that mergers with larger systems can help rural communities as it gives such providers “scale and resources needed to improve quality and decrease costs.”
In addition, “miring hospitals in legal and bureaucratic red tape will simply slow critical care to the bedside,” said Federation of American Hospitals President and CEO Chip Kahn. “The administration should recognize that the tragic COVID-19 pandemic has at least provided a natural experiment that demonstrates that hospital integration and scale can serve patients and communities during times of dire need.”