[00:00:00] Stacey Richter: Episode 396 Consolidated Hospital Systems and cunning anti-competitive contracts. Today I speak with Brennan Bilberry
[00:00:27] Stacey Richter: Thanks Shirks for this review on iTunes entitled Prepare to Learn Shirks Wrote, RHV. Relentless Health Value provides key insight from experts that you won't find anywhere else. It paints the picture of how our healthcare is tangled and who benefits.
Because of it. I have shared so many of the episodes with my colleagues who have replied. I did not know that's how it worked. Now they do. I wanted to kick off this particular show with this review because today we are again digging into the business of hospital care in this country. That's actually how San Dixon MD put it on LinkedIn recently.
He said some of the hospitals these days aren't in the healthcare business. They're in the hospital care business. And when I say some hospitals, I mean some people in decision making roles at some hospitals. There was an opinion piece in the New York Times the other day by Eric Reinhardt, and here's my highlight from his essay he writes, but the burnout rhetoric misses the larger issue.
In this case, what's burning out healthcare workers is less the grueling conditions we practice under and more our dwindling faith in the systems for which we work. Unpayed link in the show notes with my compliments Relentless Health Value is here so that our relentless tribe has the information that you need to influence what goes on in some of the boardrooms where some of these decisions are being made.
With that, let's move on. You know why my guest today, Brennan Bilberry, got into his current line of work battling hospital chain anti-competitive practices. He got into it because this behavior, which is normalized in healthcare. Would never be tolerated in any other sector of the economy. No one would get away with it because these anti-competitive practices are, hey, anti-competitive.
They spell the death of functioning markets. We kick off our conversation today, Brennan and I going through the typical hospital system consolidation playbook and how anti-competitive practices are kind of part of the typical gig here. It's quite clever, by the way, for hospital system executives to think this way.
I mean, it's elicit, and some would say on ethical, but clever. If your main metric is revenue maximization. Anti-competitive contract terms are after all a flywheel. You consolidate to get enough market power to effectively force everyone to sign your anti-competitive contracts. And then step two, after that, you break out your anti-competitive contract terms spatula, and you scrape out any remaining competition from your area.
Which leads you to step three, rub your hands together and raise prices and donate to politicians so legislation becomes even less likely. And then step four, continue to raise your prices. Don't you love it when a plan comes together. Today with Brennan Bilberry, we talk about four contract terms that any self-respecting anti-competitive hospital contract should include, and how each of them restricts competition unfairly and causes higher prices for communities, taxpayers, patients, employers.
Basically everybody, including people who work at the health system, who wind up needing medical care. In a nutshell, here's the four anti-competitive contract terms that we dig into today. Number one, all or nothing contracting wherein a hospital system says, if you want us in your network, you must include every single facility that we have in your network.
And at the monopoly level, prices we demand even in areas that might be competitive. There is a reason why a hospital system might be all Hachi Machi to buy a rando, not super profitable hospital in a rural area. The payer must include that hospital in their network then because of network adequacy or whatever.
And then from then on, all of their care settings are now in network, even the lower quality ones and all of them at the highest prices, and there's no price negotiation that's possible after that. Number two anti-competitive clause is the anti steering and anti tiering clauses. This means that a payer ASO TPA plan sponsor cannot steer members to lower costs or higher quality hospitals, nor can it offer benefit designs that have tiers.
IE lower copays. If a member goes to specified high value hospitals. So any chance of using consumerism or navigation as a way to get members to better places is just eviscerated by this little move. Number three anti-competitive clause is pricing gag clauses. It's when contract terms prohibit an ASO slash TPA from telling its plan sponsor customers.
Or members, what the price of services are before or sometimes even after the service is rendered. Claiming it's important to not let employers or patients know these costs because revealing actual prices will checks, notes, cause hospital prices to go up. I'm speechless, mystified by this logic, but okay.
I only have a Bachelor's in economics, anti-competitive contract term, four contract terms that restrict other providers in the market. So a dominant hospital uses admitting privileges or referrals or other leverage to effectively control other providers in the market, including providers who are ostensibly independent.
So while the market may look dynamic. It is really not. Some links are in the show notes to interesting articles and posts and other episodes related to this topic. My guest today as aforementioned is Brennan Bilberry, who is a founding partner over at Fair Mark Partners, which is a law firm litigating some of these antitrust lawsuits against some of these hospital chains.
My name is Stacey Richter. This podcast is sponsored by Aventria Health Group. Brennan Bilberry, welcome to Relentless Health Value.
[00:06:11] Brennan Bilberry: Thank you. Thank you for having me.
[00:06:12] Stacey Richter: I am thrilled to have you on Relentless Health Value today. So across the country we have health systems, not any secret. Consolidating, forming these vast enterprises, what tends to happen, right?
Like hospital system consolidates. Then what do they tend to do?
[00:06:30] Brennan Bilberry: You know, of course it varies a lot by system and it varies a lot by geography. So the, the differences between systems that are primarily focused on serving rural areas versus those that are focused on urban and suburban areas does differ.
But sometimes you get a hint of what's gonna happen after a hospital merger based on what the hospital will say in the merger process. So for example. There's been a number of hospitals that have said the reason that we're trying to combine is because we think we're gonna be able to negotiate better rates with commercial payers.
And that's a real indication that shortly after the merger, the people paying the bills, which are individual consumers and employers at the end of the day, are gonna be forced to pay higher prices. And that can take the, a lot of different forms. One is just more aggressive negotiating, saying we want higher prices because we're a larger system.
We have different and better services. We have a. Broader, a broader network to be able to provide care to you and your employees.
[00:07:23] Stacey Richter: Okay, so hospital system consolidates first item on the roadmap is to use their new market power to negotiate what other forms of power are there.
[00:07:33] Brennan Bilberry: It can also take the form of anti-competitive practices where a dominant hospital system will insist on certain contract terms that we believe really restrict competition and end up raising prices for consumers and employers.
And that becomes a particular problem when you and your listeners will know this well, but when you think about the state of consolidation in the hospital industry And the US right now, from around 1998 to 2015, there were 1500 hospital mergers. And then that pace actually picked up and you had the pace of hospital mergers increased by 50% in the years after that and after a really brief slowdown during COV.
The pace is picking back up again. And a few years ago, for the first time ever, the majority of physicians in this country didn't own the place at which they practiced, which means that increasingly when it comes to the prices that are paid by commercial payers, by employers and by consumers. That's determined by the hospital system in the area much more than it is by any independent physician's practices.
[00:08:30] Stacey Richter: This is all telling a probably crisp story. We've got massive amounts of, of consolidation across the country to the tune of most physicians, as you just said, no longer own their own practice. Most physicians work for somebody else, which is most likely some kind of consolidated entity. We know that as per the work of Zach Cooper.
And others when hospitals consolidate and get that marketing power, obviously they get good at the negotiation as you just said, because rates tend to go up about 23% once that happens. So for sure we have evidence of exactly the, the first thing that you said, which it's interesting that they'll say the quiet part out loud when they're talking about their right merger plans.
They'll actually put in the press release that that's, this is their intention. So I guess. If anyone is, is shocked subsequently, it's probably on on them.
[00:09:26] Brennan Bilberry: And I think I would, I would say, I mean on that, it's, it's also reflective of, part of the, part of the reason that a lot of these mergers have gone through is the ability of a lot of large hospital systems and their lobbyists and those who, you know, convey influence for them at state capitals to convince legislators and regulators and judges that this sector is different and that unlike other sectors of the economy.
This will be a benevolent monopoly that won't, that won't harm consumers in, won't waste prices when in reality what they are telling their bond holders. What they are telling other stakeholders about the merger is that they will, they'll behave just as you would expect, an unregulated monopolists to behave, which is that they're gonna raise, raise prices for, for those who are paying the bills and.
That ability to think something might be different in the hospital industry is, I think, I think part of the reason that we're in the problem that we are.
[00:10:13] Stacey Richter: Well, as Tricia Schild house wrote on LinkedIn recently, she had heard a physician leader say, And this is sad, he said, nonprofit is a tax position.
It's not a philosophy.
[00:10:24] Brennan Bilberry: Exactly.
[00:10:25] Stacey Richter: There we are. And it's also, there's just another study that came out that said not only does consolidation raise prices. On average 23%, but it also does nothing to improve quality. You also mentioned that in addition to raising prices, what these consolidated health systems hospital chains also tend to do is start doing some potentially anti-competitive things with that market power once they've managed to achieve it.
Why don't we just tick through those anti-competitive tricks, I don't know what you'd call them, anti-competitive possibilities, options. What would you consider the top of your list?
[00:11:05] Brennan Bilberry: The place that I would start, which is a symptom of and and only possible because of mergers is what we refer to as all or nothing contracting.
And this is where a hospital system, including a hospital system that is newly merged, will tell insurers and employers. If you want any of our facilities in your network, you have to include all of them in your network. And the hospital system often does this knowing that they have certain hospitals or certain facilities that the insurance network or the employer has to include in their network.
So for example, that can be the only hospital in a certain rural area of the state. That can be the only hospital in a region that has certain types of specialized facilities that you know you have to include in your insurance network. Or it can be a hospital that an insurer must include in their network because of state network adequacy requirements that require a maximum distance between facilities.
And once a hospital does that, they can say, not only do you have to include all of our facilities in your network, if you want any of them, you have to pay monopoly level prices at all of those facilities. Even the ones that do face much cheaper competition. So you can imagine a situation where a hospital has facilities that are monopolies in a, in a more rural area, and then has a hospital that does face competition in a city.
They can say you also have to pay the same monopoly level prices for those services in the city and much higher prices than our competitors. If you want to include any of the rural hospitals that we know that you need to have. And that's a really, a really incredibly powerful tool and, and I would say an incredibly powerful tool when it's particularly misused in the hospital market specifically.
And this type of conduct, this all or nothing contracting was a big part of a very important case in the area that we work in, hospital antitrust. Against Sutter, which is a hospital system in Northern California where it was alleged that Sutter used all or nothing contracting by telling insurance networks if they wanted its rural facilities or really any of its facilities.
They had to include everything including the hospitals that were in competitive markets in cities. And they had to include those at extremely high prices. And that case resulted in Sutter paying a $575 million settlement in one of the two cases that was brought against it, And the second case that's still ongoing and being appealed.
So that's the first kind of first component that can happen, particularly after a merger.
[00:13:19] Stacey Richter: Yeah, I can see how powerful that is. If you are a health system, first of all, it's a powerful reason to. Expand and consolidate, be the playbook there would be get hospitals in rural markets, even if they're not profitable at all.
Because by consolidating those hospitals into the health system, now you have leverage in actually competitive, highly profitable markets.
[00:13:46] Brennan Bilberry: Exactly. In, in mergers that we have evaluated and in takeovers that we've evaluated, you can see evidence of what on their face would look like a non-economic or non-economic decision making to acquire a money losing or break even hospital.
That's the only one in its certain rural area. When you think about it in the context of system-wide contracting and negotiating, that changes how you would think about the economic incentives for a hospital to acquire that facility And the fact that that. Leverage over having the only hospital in a certain area And the amount of leverage that that can give you over commercial payers really does change how you think about those type of acquisitions.
[00:14:25] Stacey Richter: Moving on to number two then, and I, I like how you teed up this all or nothing contracting at the very beginning because I definitely could see how the sort of underpins some of the other things that I'm sure we're gonna get to. What's your number two?
[00:14:38] Brennan Bilberry: The second is imagine a situation where you, where you are engaged in all or nothing contracting and a insurance network has to include all of that hospitals facilities in their, in their network or, or none at all.
There's still a step that can cause a lot of problems on its own and, And we would argue is really anti-competitive on its own. If you are a health plan, one of the things that you could do if you're forced to engage in that kind of negotiating or contracting is say, okay, we have a broad network And we have lots of providers, some of which are much more expensive than others, so why don't we direct patients who are part of our health plan to lower cost higher value providers?
If there's a really high cost provider in a market and a very low cost provider. You would incentivize patients maybe with a lower copay, maybe with direct financial assistance to go to the lower provider. So here's an example In a market that we're investigating right now, a C-section birth costs about $44,000 at one hospital and two miles down the road.
At a hospital that's rated of similar quality, that C-section costs about $21,000. A health plan in that market tried to encourage its members through financial incentives to go to the lower cost provider. Now that would've been better for the mother, the family, better for the health plan and better for competition.
But the hospital system that was charging the $44,000 stepped in and told that health plan's insurance network that directing patients towards lower cost care that wasn't at its facility, was banned in its contract. If these contracts basically say we always have to be the most favored hospital and you can't direct patients to pick care on better quality or lower cost, or any metrics that mean that we're not, not in the very top of the, not in the top of the pile.
And the problem is not just the kind of extreme examples like that and where you're having a C-section that costs double the cost for the same quality, but that the existence of these terms, where we call them anti steering and anti tiering, which means you're not allowed to steer patients towards a different network, or you're not allowed to create tiered networks where one hospital is ranked higher than another.
That means that innovative insurance products just don't come up in the first place. So using tiered plans as an easy example, if a high price dominant hospital in a market has forced these provisions into its contract with insurance companies, the tiering becomes almost pointless because either.
Insurance companies won't offer tiered plans because they wouldn't save that much money if you have to put the highest cost provider in the highest tier. That's not really the the point of a tiered health plan.
[00:17:08] Stacey Richter: So I think what we're talking about here with tiers is you would create a benefit design that says if you go to this hospital, the copay is less.
[00:17:16] Brennan Bilberry: Exactly, exactly.
[00:17:17] Stacey Richter: Which, if, if we think about patients or, or plan members being consumers and maybe going to the place with a lower copay, this is a common strategy to, to try to help members find the best place for their care. You create kind of tiering and you say these, these hospitals, you go to, these hospitals, you, you'll pay less.
And this is what I think you're, you're saying with these most favored hospital, the anti steering, anti tiering, you can't create benefit designs. That have lower copays at less expensive, just as good quality places. And you can also have care navigators to have them go to this other cancer center just like wherever they wind up.
It has to be there. There can be no financial incentives or, or anybody doing anything to keep patients away from these really high cost places.
[00:18:06] Brennan Bilberry: That's exactly right. And you also end up with kind of comedic examples where. A tiered plan is offered that incentivizes people to go to different places with lower copays, but because of the hospital contract.
The highest cost provider is still ranked in the, in the top tier, so there's no, it serves no purpose and that's where the contract really undermines the goal of, of directing patients to live the highest value and lowest cost care. This type of restriction, this anti steering or anti TI restriction, was a key part of a government case that was brought against a system in North Carolina called Atrium.
And the government there alleged that Atrium had put these anti steering and anti tiering restrictions. Into its contracts with most of the major insurance companies, and that basically eliminated the ability for them to offer truly accurate tiered networks because the Atrium contract didn't allow other hospitals to be ranked in a tier above it.
And the result of that litigation, there was a settlement that prohibits atrium from using anti steering restrictions in its contracts. What I'll say is another thing that kind of differentiates this sector versus others is that remarkably, many hospitals continue to use anti steering restrictions even after the Sutter and Atrium litigation, which both, which both were looking at these restrictions and I, I don't know too many other industries where you'd have two very prominent cases that concerned conduct and you still have major established players in that industry.
Continuing to use the same kind of terms.
[00:19:35] Stacey Richter: Yeah, And if you listen to the podcast with Cora Opsahl, who leads the 32 BJ Union's Health Plan, she gets into the consequences of this from the health plan standpoint, this anti steering, anti ter. There was one hospital system in New York City that had a deal with the TPA.
Not 32 BJ, but the TPA that was anti steering, anti ti. And the union wanted to do a really nifty maternity program so that they could have like, it was like a $30 total out of pocket for maternity for anybody having a baby. The, the plan obviously has some financial, if they wanna offer that, they have to make the books balance.
And this one particular hospital was so expensive that if they wanted to offer this benefit to their union members, they couldn't. Go to this hospital that was way more expensive at no higher quality, and it was like a two year operation and took a lot of effort to try to unwind this, that this one hospital vis-a-vis their contract with a third party, you know, another entity was limiting this union's ability to offer their members.
A really great maternity benefit. So like there are so many downstream consequences and, and just it seems like things that can wind up negatively impacting patients even beyond the direct impact, which is pretty substantial.
[00:21:00] Brennan Bilberry: Definitely. I think about that example and, and 30 should be, Jay's done really amazing.
Work being willing to stand up on this, but how many health plans have the wherewithal to be able to fight back against something like this for two years? For small and medium employers, it's, it's often just easier to give up and, and continue to play within the current system. And I, I don't, don't blame anyone for that.
But I think that's one of the things that a lot of the dominant hospital systems are counting on, is that there's just not gonna be someone who's gonna be willing to stand up and take on these type of contract terms. And then the other reason that that's the case is, is the third item I was gonna mention, price gag clauses And the Wall Street Journal's done some really great reporting on this.
Basically this is a provision that prevents it. It goes in some ways beyond what we were just talking about. It prevents insurers and TPAs from even telling members of a health plan what the price of their care is gonna be before, before they receive it. And again, you can't really think about another industry where a supplier could contractually bar.
Other market participants from knowing the prices that they're gonna pay for a product.
[00:22:05] Stacey Richter: Recapping, we're on number three here. Three anti-competitive practices that when a hospital health system hospital chain consolidates and derives enough market power that they can stick stuff in their contracts, such as these three things.
And the first one that we talked about was the all or nothing contracting. Then we talked about the anti steering, anti tiering, and now we're talking about these gag clauses. Entities down the line are not allowed to inform members directly of what a, a price. Would be, or they're not allowed to tell the employer health plan sponsor what the price, like who, who's getting gagged to whom?
[00:22:45] Brennan Bilberry: It's both. So the way that we've seen this manifest most often is that the hospital imposes this provision on the insurer or the TPA, And they say You cannot let the self-funded employer know the prices that we have contractually agreed for them to pay. Which is, again, taking a step back, just a, a really remarkable thing that they've been able to accomplish
[00:23:07] Stacey Richter: isn't that in direct contracts with the transparency regs that just came out.
[00:23:11] Brennan Bilberry: It is a lot of these gag clauses are legacy gag clauses that have existed before those transparency rules. And part of the reason I think that you've seen, it's certainly part of the reason for our work being possible where we're able to litigate against a variety of systems. Is that those gag clauses were designed to prevent the type of scrutiny that we would bring or that employers would bring in litigation, but they've, they've continued to be enforced until relatively recently.
There was a recent example in North Carolina where the state treasurer attempted to request the prices that were being charged by UNC healthcare to the state health plan, And the response that he received was hundreds of pages that were redacted, where they said the prices that the state health plan had to pay were more confidential.
So while those, the point of the hospital price transparency rule has been to break down these barriers, they still exist.
[00:24:04] Stacey Richter: Yeah. And in episode 249, I talked with Dale Falwell, who is the North Carolina Treasurer, and he gets into just the funny, not funny hundreds of pages of redacted pricing that the health plan had.
I'm gonna say the audacity to send over. That was a couple years ago. Are you still seeing the remnants of those gag clauses that these TPAs, et cetera, are still honoring because we're stuck in this kind of messy middle and they're kind of like, who's gonna go after me?
[00:24:38] Brennan Bilberry: Definitely. Definitely. I think the federal regulators who were trying to create and enforce these rules are, have been aggressive in moving than the constraints that they have.
There are still, first of all, a lot of hospitals who are not complying fully with the, with the price transparency rule. But then second, you, we still hear examples of individual employers asking for the prices that are their contractually negotiated prices, that the hospital And the TPA is negotiated on their behalf.
And still having impediments being put up to them, being able to access that information. So I we're moving in the right direction on this issue, but there's a lot more to be done. And it's quite clear based on how hospitals reacted to the price transparency rule, which was first suing to attempt to not comply with it, and then second, in many cases, just not complying with it for several years.
There's still many fights ahead to get. Clear and transparent price information, particularly for self-funded plans.
[00:25:33] Stacey Richter: So the playbook is just keep on keeping on until some employer gets loud about it while meanwhile continuing to spout the party line. That transparency somehow will cause prices to go up to employers who don't know any better,
[00:25:48] Brennan Bilberry: right?
The idea that keeping prices hidden from the people who are paying them. Somehow keeps prices lower. It just, it defies logic and, and really wouldn't to pass the left test in any other industry.
[00:25:59] Stacey Richter: It definitely sounds quite contrived for reasons of self-interest if we're just talking. Talking here. Yeah.
Okay. So that's number three. Gag clauses. What else?
[00:26:09] Brennan Bilberry: So the fourth one is less clear cut than the, than the previous three that we've talked about, but it's a, it's a really growing trend in a lot of different markets. Which is the restrictions that a dominant hospital will put on other providers, including those that are ostensibly independent.
We've seen this example in several parts of the country where a hospital system will tell an independent provider that could be an independent physician group, it could be an independent specialist. That if they want preferred access to referrals from the hospital system or they want admitting privileges or they want other services or goods that they need from a hospital that they either need to sell to the hospital, sell their practice to a hospital, or at least agree to be part of that hospital's network in terms of the way that that hospital negotiates, negotiates with insurers and TPAs.
That gives the hospital even more power over pricing because many of the formerly independent providers that might have been cheaper places for a patient to go are no longer available separate from the hospital.
[00:27:06] Stacey Richter: As we discussed at the top of this conversation, when health systems consolidate and collect market power, prices will go.
Approximately 23% based on the studies. What you're talking about in number four here just exacerbates that existing trend. I mean, Dr. Scott Conard was on the show recently and he said that in North Texas, when the health system bought a local ACO that included a number of different physician practices, the prices went up a hundred million dollars year over year.
So that's when the health system outright. Purchases the local physicians, you're saying that they don't have to outright purchase the local practices. They could just force the local practices to charge higher rates so that there's no low cost options in that local market, even if the health system doesn't technically own the practice.
[00:27:57] Brennan Bilberry: That's exactly right. These may still look like independent practices, but in reality, and we've seen this in probably about a dozen areas across the country. Where, you know, the reality of the situation is that the prices are all raised to, or close to the level of hospital prices, which, which can have just a really devastating impact on the ability of small employers in that area to afford care.
And there's no way for a consumer to really differentiate when that that information isn't fully conveyed about, about the affiliation.
[00:28:26] Stacey Richter: Yeah. You even just think about that a hundred million dollars example, that's. A hundred million dollars that the community, that those employers didn't have to give employees raises or a hundred million dollars that the community itself didn't have to build parks or housing.
Reiterating our lists of four power moves that some of these health systems engage in after they have consolidated and, and control. Now the, the market dynamics in an area. Thus making them able to take advantage of, of some of these practices in order to, in a way, create a downward spiral if you start thinking about it, right, like they have market power in an area, and then through these practices, which they then can insert into their contracts, they gain more and more power, right?
It's like a snowball going down. But the, the four things that you said are all or nothing contracting, which we talked about at the beginning. Then we had the anti steering, anti tiering as your number two. Then we talked about the gag clauses, which is an emerging area just because of the transparency.
So we'll see where that shakes out. And then the last thing that you said was some of these health systems putting restrictions on other providers who are technically independent but have been strong armed into doing things with their pricing and, and other things, which effectively, again, diminish competition and market dynamics and just.
Keeping in mind if anyone isn't clear on market dynamics, you might wanna listen to the show with either Mike Thompson or the one with Gloria Sev and Chris Skisak, which really get into the idea that if you don't have any market dynamics, then competition and capitalism doesn't work.
[00:30:03] Brennan Bilberry: Exactly. And, And the only thing I would add on those, on the list of four is that each of these individually is problematic.
They each, they each contribute to both rising prices and then. As you were saying, they also contribute to this kind of self-reinforcing market power that makes it harder for other practices or other systems to open up in that area. But what really is even more problematic is how these interact with each other and that they feed off of each other.
And as I mentioned, if you do all or nothing, if you're forced to engage in all or nothing, contracting one way around that. Would be to steer patients that's undermined by anti steering or you could create some kind of narrow network with that involved a lot of outpatient providers that aren't affiliated with the hospital.
That's eliminated by the restrictions that are placed on supposedly independent physicians. So these really interact with each other in a way that makes them much more. Problematic from a competition and price perspective than the sum of their courts. And that's core of a lot of, a lot of the antitrust cases that have been filed, including some of those that we're litigating right now.
[00:31:04] Stacey Richter: So if someone sees that in their local market, there's one or more of these anti-competitive clauses that are in contracts, do you immediately. Go to court, like how do you think about the road to redressing these things?
[00:31:21] Brennan Bilberry: There's a lot of steps that Ken and Ken and should be taken the most basic, like trying to, trying to see if there's an alternative contract arrangement being very aggressive in the context of of negotiations.
How systematic change is gonna happen in this area. Really, advocacy and, and changing the laws and regulations is gonna be where this problem is addressed over the long term. We, we are a, we're a law firm and, and what we do is litigate cases of anti-competitive conduct by hospital systems, but the be the better outcome in the long term would be better regulatory oversight and, and better legislation.
That blocked some of these practices in the first place. One of the challenges I think that has both contributed to consolidation and contributed to the lack of enforcement of antitrust laws And the use of a lot of these anti-competitive terms. Is this collective action problem that exists in this industry.
Hospitals are one of the most well organized and well-funded special interests in every state house in the country and in Congress. But while individual consumers and individual employer health plans are paying these hugely inflated hospital prices, which individual, one of them has the incentive to stick their neck out and push back, and that is, that's a big challenge.
There are great groups that are trying to take that on. You mentioned the employer's form of Indiana as one of those where if businesses and consumers and patient advocates can come together and start to educate legislators about the problematic nature of some of this type of contracting, the outcome can be, and we're starting to see just the doors just starting to open a little bit in, in a number of states, you can see the legislators taking action to ban some of these practices.
To do things like mandate the availability of site specific negotiations, and which can mean that you undermine the, the point of all or nothing, negotiating and contracting, putting more enforcement teeth behind transparency initiatives so that we're not in this liminal state between transparency and non-transparency and, and issues like greater scrutiny of nonprofit status, which you mentioned at the start.
Engaging in behavior and pricing that looks like a corporate monopolist, maybe state regulators should be asking why are we giving that firm an exemption from paying taxes in the first place? So I think for there to be a broader solution to this issue, it is gonna take collective action on the behalf.
On, on the part of consumers and employers. To push legislators and regulators to understand the costs of an action And the suppressed wages, reduce job growth, all the things that those who are listening here realize are happening. But that for a lot of legislators are just very, very far from their understanding of,
[00:33:56] Stacey Richter: yeah, And this is something that, I think it was Chris Skisak that, that said this, there's, there's three ways to control hospital prices.
The first is market dynamics, making sure that there actually is competition, which probably would be the best. Then you have legislation, and then the third is litigation. And to your point, if legislation is going to happen, coalition building amongst employers and consumers is super important because on the other side you have, as you said, the hospital lobby, the health systems.
Are very well organized and very good at public relations. So coalition building is going to be, is incredibly important. Also, physicians, nurses, and other clinicians might not like some of the stuff that we just talked about. So Brennan, where can people learn more about Fair Mark Partners? If they are interested?
[00:34:49] Brennan Bilberry: They can go to our website, which is fair mark law.com. And on there we have some of the cases that we've already pursued against four different. Four different hospital systems on antitrust cases around the country.
[00:35:00] Stacey Richter: Brennan Bilberry, thank you so much for being on Relentless Health Value today.
[00:35:03] Brennan Bilberry: Thank you for having me, and thanks for talking about these issues.
[00:35:06] Stacey Richter: So let's talk about going over to our website and type in your email address in the box to get the weekly email about the show that has come out. Sometimes people don't do that because they have subscribed on iTunes or Spotify and or were friends on LinkedIn. What you get in that email is a full and unredacted unedited version of the whole introduction of the show transcribed.
There's also show notes with timestamps, so you get everything that you need to decide if you wanna listen or not. Just apprising you of the options that are available. Thanks so much for listening.