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Congressional Committee Hearing Recognizes the Importance of Physician-Led Hospitals to Address Consolidation

May 17, 2023

Chairman Vern Buchanan Called on Congress to Repeal the Moratorium on Physician-Led Hospitals

Washington, DC – Vern Buchanan (R-FL), the chairman of the Ways & Means Subcommittee on Health, called on Congress to repeal the moratorium on physician-led hospitals in the May 17, 2023, Hearing on Why Health Care is Unaffordable: Anticompetitive and Consolidated Markets.

The chairman stated many that many facets contribute to consolidation and higher prices and fewer options for patients, stressing that current federal incentives make the system less competitive and more expensive. He cited practices including: insurers buying large PBMs, pharmacies and medical practices; insufficient site neutrality policies in Medicare; acquisitions by large, nonprofit hospitals; and the prohibition on physician-led hospitals as factors. 

Chairman Buchanan stated Medicare Advantage and Medicare Part D represent the best examples in support of competition, with robust marketplaces and cost containment.  He suggested increased vertical integration is one of the worst examples of consolidation, stating the merged entities reduce patient access and raise prices.  He acknowledged that prescription drugs cost too much; however, he stated the three PBMs control 80 percent of the market and competition is not working in this area. 

He also stated that large hospital systems are buying smaller hospitals and independent practices to increase their size and stop competition.  He suggested the need for policies to increase competition and advance site neutrality.  The Chairman also called for bipartisan solutions to the problems of consolidation in the health care market.  He cited the Healthy Future Task Force recommendations as a starting point, adding that any policies should save patients money by paying doctors for the care they receive, encourage greater competition not consolidation, and ensure no entity can game the system through anticompetitive behavior. 

Per Chairman Buchanan’s opening statement:

“I worked with my colleagues on Speaker McCarthy’s Healthy Future Task Force to come up with ideas on how to address the lack of competition in health care.

“We released our recommendations last summer, and it’s time we put in the hard work to implement these policies.

“We should look closely at:

  • reforming site-neutral payments;
  • repealing the physician-owned hospital moratorium;
  • slowing down the consolidation of hospital systems;
  • and the practice of insurers teaming up with PBMs and pharmacies to stop the market distortions and bring real competition back to health care.

“It won’t be easy, but our constituents are the ones hurt by our inaction, and we owe it to them to fix the problem.

“As I said before, I am hopeful we can find bipartisan solutions to the problem of consolidation in the health care market.

“I look forward to working with my colleagues on both sides of the aisle to right this wrong.”

Physician-Led Healthcare for America (PHA) promotes, educates, and advocates for exceptional patient-centered care through physician leadership. Founded in 2001, PHA advocates for the interests of physician-owned hospitals, physician-led facilities, physician-led practices and other physician-led initiatives at the federal, state and local levels. The organization also supports its members in their efforts to advance the quality and availability of healthcare in their specific communities.