Jun 12 2019
Welcome to this hearing of the Subcommittee on Antitrust, Competition Policy, and Consumer Rights.
Today we are pleased to have with us four distinguished witnesses to testify about vertical consolidation in the healthcare industry. We appreciate you taking the time to be with us today.
We are holding this hearing to examine the competitive implications of vertical mergers in the healthcare industry. We will also explore what’s driving this consolidation.
Over the past several years we’ve seen several massive, multi-billion dollar mergers combining the largest names in healthcare. But for every one of these mega deals, there are many more transactions that combine different layers of the healthcare supply chain, many of which involve hospitals acquiring local physician practices.
These deals are reshaping the way patients receive and pay for healthcare. We hope that these transactions will improve the quality and reduce the cost of healthcare by eliminating inefficiencies and aligning incentives. But, vertical integration can also enable market power to be used anti-competitively, allowing the merged firm to use its new structure to disadvantage rivals and harm consumers. We’ll take a look at all of these issues this afternoon.
Before we move one, let me say a couple of words about recent Congressional interest in antitrust. Over the past year, this Subcommittee has held several hearings examining monopolization, including looking at how the U.S. and the European Union analyze these issues. We will continue to hold hearings exploring this topic, including what the DOJ and FTC are doing to investigate alleged antitrust violations.
Now, as to why we have two antitrust agencies handling civil antitrust enforcement, well that is beyond me. We’ve learned recently from leaks to the media that the agencies are gearing up to investigate the largest tech firms in the country. I hope they will do so prudently and be guided by the evidence and not sloganeering from industry or politicians.
What isn’t clear to me is why or how the agencies are divvying up these investigations between themselves. If we care about efficient and effective antitrust enforcement, particularly in an industry that is a key driver of our national economy, then we shouldn’t be wasting duplicative resources in this effort. We also shouldn’t be splitting expertise between the agencies when many of the competition issues will be the same in each investigation.
Ironically, it is the antitrust agencies themselves that appear to be engaging in market division here, putting their bureaucratic interests ahead of what’s good for the American consumer. Antitrust enforcers could do a better job with the resources they have, and be more effective in doing so, if they focused less on what they each get out of these investigations and more on serving consumers.