Hospitals request 2 changes to merger rules

The American Hospital Association is urging the Federal Trade Commission and the Justice Department to update merger guidelines in two ways. 

The AHA requested the changes in a March 30 letter to antitrust enforcers. The letter was submitted in response to a request by the FTC and the Justice Department for comments on how to revamp merger guidelines for businesses. The agencies are seeking suggestions on how to "modernize the merger guidelines to better detect and prevent anticompetitive deals." 

The AHA said the merger rules do not need major revisions, but they should be revised in two ways. 

First, the AHA said antitrust enforcers should correct defects in economic models used to evaluate hospital transactions. 

"Flaws in the FTC's econometric models result in inaccurate forecasts about the effects of hospital mergers on consumers," the AHA wrote. "Changes to the merger guidelines should correct this approach so that the antitrust agencies' economic analysis reflects the realities of the hospital sector and credits the many pro-consumer benefits of hospital transactions."

Second, the AHA said guidelines should enable the antitrust agencies to account for better care coordination achieved through mergers.

"Economic research has shown that partnering with hospital systems typically enables the acquired hospital to provide measurable benefits to patients in the form of lower health care costs, improved patient care and better access to providers," the AHA wrote. "The agencies and the guidelines should recognize these additional benefits to hospital mergers."

Comments on how to update the merger guidelines can be submitted to the FTC and the Justice Department through April 21. 

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