Battling against healthcare consolidation
by jerry on June 06, 2020
Kaiser Health News published a piece on California's current Attorney General's battle against consolidation in the healthcare industry. Even before the pandemic, Northern California had already seen a lot of consolidation among its providers (clinics and health systems). The article reports that the pandemic has only accelerated the trend of consolidation as physician practices have seen very light patient volume. The article also referenced a Health Affairs article, indicating that "In 2010, about 25% of California physicians worked in a practice owned by a hospital. By 2016, more than 40% of doctors worked in hospital-owned practices."
Consolidation reduces competition, which ends up giving more power to the suppliers over the purchasers. The California Medical Association opposed a bill to grant the attorney general more tools to stop mergers, saying that the legislation, as written, is too broad and would including leasing and other contracting arrangements and also does not provide for a meaningful channel to appeal decisions. It is likely that the California Medical Association has good points here, as writing good laws can be very difficult.