by Jordan Roberts
Director of Government Affairs, John Locke Foundation
The Justice Department settled a lawsuit in which the North Carolina-based Atrium Health hospital system was said to have participated in anti-competitive practices:
The antitrust suit against Atrium Health focused on language in its agreements with health insurers that had restricted the insurers from creating plans that steered patients to competitors offering lower prices, according to the Justice Department. Under the settlement, Atrium said it would stop enforcing such clauses and not seek them in future contracts in the Charlotte area, where it has a large market share.
The nonprofit hospital operator, which owns or manages 44 hospitals in North and South Carolina, also agreed not to block insurers from disclosing cost information to consumers.
Atrium said it didn’t violate any law, and the settlement doesn’t require it to admit wrongdoing or pay a penalty…
…The suit, filed in 2016 by the Justice Department and North Carolina’s attorney general, said that Atrium’s contracting practices were anticompetitive, and that the hospital operator “uses its market power to impede insurers from negotiating lower prices with its competitors and offering lower-premium plans.” The suit said the hospital system had a market share of approximately 50% in the Charlotte area.
Hospital mergers and consolidations are directly responsible for a decent portion of rising health care costs. Often when large markets are consolidated into a few or a single provider, the patients are the ones that are made worse off in the form of higher prices and fewer choices. A major problem with the current model of how health insurance works are that patients never see the price of any service until the end. Most people assume the insurer is acting in their best interests by providing the highest quality providers and the most options possible. This scenario is sometimes very true. In some instances where this scenario is not the case, the hospitals may be more to blame.