FTC chairman says technological advances could lead to healthcare price fixing – KFF Health News

New technologies make it easier for companies to set prices and discriminate against individual consumers, the Biden administration’s top consumer watchdog said Tuesday.

Algorithms allow companies to set prices without clearly coordinating with each other, FTC Chairwoman Lina Khan said at a media event hosted by KFF, creating a new test for regulators overseeing markets.

“I think we may be entering an era of somewhat novel pricing,” Khan told reporters.

Khan is considered one of the most aggressive antitrust regulators in recent US history and is particularly concerned about the harm that technological advances can do to consumers. US antitrust regulators, the Federal Trade Commission and the Department of Justice set a merger challenge record September 30, 2022- For the fiscal year ended this year, Bloomberg reported.

Last year, the FTC successfully blocked a $7 billion acquisition by biotech company Illumina of the founder of cancer screening company Grail. The FTC, the Department of Justice and the Department of Health and Human Services launched a website on April 18. The Healthy Competition Network makes it easy for people to report suspected anti-competitive behavior in the healthcare industry.

The American Hospital Association, the industry’s largest trade group, has frequently criticized the Biden administration’s approach to antitrust enforcement. In comments in September about proposed guidelines for companies issued by the Federal Trade Commission and the Justice Department, the American Heart Association said “these guidelines reflect a fundamental hostility to mergers.”

Pricing eliminates competition in the market and often makes goods and services more expensive. Khan said the agency has argued in court documents that price manipulation “remains illegal even if done algorithmically.” “There is no algorithmic exemption from antitrust laws.”

Khan said that by using the same algorithm to determine prices, companies can effectively charge the same fee “even if they’re not, you know, behind the scenes handshakes and pricing.” Residential property manager.

Khan said the committee is reviewing using artificial intelligence and algorithms to serve individual consumers “based on a set of specific behavioral data about you: the websites you visit, who you know, who you have lunch with, where you live”. do value “

As health care companies change their business structures to increase profits, the FTC is changing the way it analyzes practices that could harm consumers, Khan said.

The first priority, Khan said, is to hire people who “can help us get insights” into some of the more elusive algorithms. It’s paid off in the form of legal action, he said, “and that’s only possible because we have technical experts on our team who help us figure out what these algorithms are doing.”

The Federal Trade Commission has traditionally regulated health care by challenging local or regional hospital mergers that could reduce competition and raise prices. But Khan said consolidation is already happening in healthcare.

Integration of geographically non-overlapping systems is increasing, he said. Additionally, hospitals now often buy physician practices, while pharmacy facility managers start their own insurance companies or mail-order pharmacies — and vice versa — pursuing “vertical integration” that can harm consumers, he said.

Khan said the FTC is hearing more complaints about “how these companies exploit their monopoly power” and “use it to cause high prices for patients, reduced services and poor conditions for healthcare workers.”

Regulating anti-competitive conduct

Khan said he was surprised by how many health-care workers responded to the commission’s recent proposal to ban “non-compete” clauses, contracts that prevent workers from jumping ship. The Federal Trade Commission on Tuesday issued a final rule banning the practice. He said the ban targeted low-wage industries like fast food, but many of the comments supporting the FTC plan came from health professionals.

Health workers say the non-compete agreements are “personally destructive and hinder patient care,” Khan said.

In some cases, doctors wrote that their patients were “very frustrated because they wanted to stick with me, but my hospital said I couldn’t,” Khan said. Some doctors commute long distances when changing jobs to avoid moving other family members, he said.

KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one of KFF’s core operating programs – an independent source of health policy research, polling and news. Learn more about Guha.

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