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Physicians Advocacy Institute

Promoting Competition

“The Vital role that physicians play in our health care system-providing high quality, cost-effective care to patients – should not be undermined by the push towards corporatization.” Robert W. Seligson, PAI President and CEO, North Carolina Medical Society.”

PAI is very concerned about the anticompetitive implications of the massive consolidation that has been occurring throughout the health care system. Today’s health care marketplace is increasingly dominated by large, highly integrated corporate entities that merge with, or acquire, other entities to expand their power to impact important aspects of the system.  

The types of entities involved in this systemwide trend towards consolidation include but are not limited to insurers, health systems and hospitals, pharmacy benefit managers (PBMs), physicians/other health care providers and pharmacies.  Consolidation has occurred both “horizontally” (integration of two or more entities of the same type, e.g., a merger between two hospitals) and “vertically” (integration between entities with different functions in the system, e.g., an insurer that purchases a PBM).  The physician “marketplace” has also seen a sharp trend towards integration, primarily through hospital acquisitions of physician practices and physicians entering into employment arrangements with hospitals or health systems. 

Proponents of consolidation argue that it creates larger, more highly integrated delivery systems that foster better coordination of care for patients, improve quality and reduce costs.  

However, PAI has vocally questioned the assertion that bigger is always better when it comes to health care delivery.  Certainly, there are several examples of large, highly integrated health systems that empower physicians to manage their patients’ care by arming them with information and providing tools to provide the best possible care.  All too often, however, these large entities are more focused on delivering maximum profits for corporate shareholders, which they achieve by raising prices and exerting tight controls over physicians’ clinical decisions, including prescribing practices, for their patients.   

Some of the areas where market power of these entities can work against patients’ interests include:

  • Higher prices for services and insurance premiums
  • Restrictive networking practices, often limiting access to the patient-insured’s choice of primary care physician/specialist/ hospital system 
  • Strict controls over the care that is delivered or covered under patients’ benefit plans
  • Prescription drug protocols that range from formularies to “step therapy,” requiring that patients “fail first” on lower cost pharmaceuticals in order to qualify for higher cost but clinically indicated pharmaceuticals.  

PAI Advocacy Efforts to Promote Competition and Champion Physician-Led Delivery Options

PAI submits supportive statement to the U.S. House E&C Health Subcommittee on Health for Patient-Led Care
PAI letter supporting the U.S. House of Representatives E&C Health Subcommittee's hearing on the lack of competition in the healthcare marketplace and to consider lifting the moratorium on physician-owned hospitals (POHs).
Statement | Press Release

PAI Recommendations to HHS on Improving Competition in the Health Care Market
PAI letter to HHS includes recommendations for improving competition in the health care market, identifying specific policies that create an unlevel playing field that benefits large, corporate entities over physician-led practices and physician-owned hospitals.

PAI Letter to the U.S. House of Representatives Energy and Commerce Committee
PAI letter to the House E&C Committee urging continued scrutiny regarding the growth of the 340B program and the anticompetitive impact on the health care marketplace.

PAI Letter and Press Release to the U.S. House of Representatives Subcommittee on Oversight and Investigations
PAI details the extent and impact of rapid consolidation occurring in the health care marketplace.

PAI Urges Department of Justice to Bar Insurer Mergers
PAI weighed in against government approval of proposed insurer mergers that would have resulted in expansive market power.

PAI Statement Supporting US Department of Justice lawsuits enjoining proposed mergers

USA Today article quoting PAI President Robert W. Seligson