Lawmakers told: Bill won't solve health care consolidation worries

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An assistant attorney general told the Senate Health and Welfare Committee on Friday that the current version of a bill designed to stop anti-competitive behavior in the health care industry would be ineffective.

Wendy Morgan, who runs the public protection division for Attorney General William Sorrell, testified on S.245, a bill that would require hospitals and hospital systems to disclose information to state regulators and consumers when buying independent practices.

Morgan was skeptical of the current version of the bill — which would require hospitals or hospital systems to notify both the Green Mountain Care Board and the attorney general's office at least 30 days before acquiring an independent practice.

"This bill would require that certain information come to the attorney general's office automatically, and I think that if the desire is to ensure that there is antitrust review for acquisitions, this kind of reporting is not going to accomplish that," she said.

"I think generally the antitrust questions are going to be complaint-driven," Morgan said. "A business — or perhaps more importantly, advocates in the health care arena — will notice when there is a concentration of entities and mergers and acquisitions."

Morgan said her office has investigated two health care antitrust complaints. They involved the University of Vermont Medical Center (formerly Fletcher Allen Health Care) partnership with Central Vermont Medical Center, and the abandoned acquisition of a kidney dialysis center.

"Recently I've heard that there are concerns that there's no independent orthopedist in a certain area," Morgan said. "That's the kind of thing where if somebody comes to us with very specific information on which we can act, we will act."

Al Gobeille, the chair of the Green Mountain Care Board, which regulates hospital budgets and insurance rates, said in an interview that the board has been monitoring whether hospitals get increased revenue from acquiring independent practices.

Al Gobeille

Al Gobeille is chairman of the Green Mountain Care Board. File photo by Morgan True/VTDigger

Gobeille said if a hospital gets increased money from acquiring a practice, it would show up in what the board calls "net patient revenue." That's money that hospitals get from treating patients — not the money they ask for from insurers, or make from cafeteria sales.

"My point is, we're very concerned about it. We're not turning a blind eye to it," he said. "But we have no authority to tell a hospital" that it can't purchase an independent practice. "Most of the time when this has occurred it's been in small hospitals where small practices either moved into the hospital or they were going to close."

Brian Martin, a lawyer for the Green Mountain Care Board, told the Senate Health and Welfare Committee that the board is "not an antitrust regulator." He said that if staff had any concerns about anti-competitive behavior, they would take them to the attorney general's office.

"The board has no authority to effectively police, investigate or enforce antitrust laws, nor does it have any expertise in conducting an inquiry," Martin said. "The state and federal regulators are the appropriate authorities for antitrust law, and the board very much recognizes this reality."

Sen. Tim Ashe, D/P-Chittenden, who is the lead sponsor of the bill, said he wants to bring the bill to the Senate floor and is willing to work with opponents and skeptics of the bill to get it done.

"I believe that the reporting requirements add virtually no meaningful administrative burden," he said. "Almost any reform proposals are typically met with resistance under the guise of 'It's duplicative. It's redundant,' and so on."

He said state officials should be asking, "Why haven't we been more concerned with the disappearance of independent practices, a disappearance that has resulted in increased cost to Vermont consumers?"

"I think that working together we can reach agreement on a number of important provisions," Ashe said. "The issue frankly is too important, and if there are better ways to get at it, I'm all ears."

The Senate Health and Welfare Committee will continue taking testimony on S.245.


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