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Chairman Herger Announces Hearing on Health Care Industry Consolidation

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Recent years have seen a large number of acquisitions and mergers in the health care industry. Among typical transactions, hospitals are buying or merging with other hospitals, hospitals are purchasing physician practices, physician practices are merging with physician groups, and large insurance companies are purchasing smaller plans. Industry experts expect regulations and policies contained in the new health care overhaul to exacerbate this trend.

While such consolidation may facilitate greater efficiencies and deliver higher quality services by eliminating duplication and excess capacity, many experts are concerned that some consolidations are being driven primarily by a desire to increase reimbursements. Richard Feinstein, director of the Bureau of Competition at the Federal Trade Commission, warned that provider consolidation "can create highly concentrated markets that may harm consumers through higher prices or lower quality care."

In announcing the hearing, Chairman Herger stated, "While consolidation within the health care industry is not new a phenomenon, all signs point to it accelerating in the coming years. In some circumstances, consolidation produces desirable results like improved efficiency and quality. However, we must ensure that consolidation is not simply used as a tool to increase revenues by driving up Medicare spending and the cost of private health insurance. This hearing will provide members with a better understanding of what is currently taking place, what is expected to occur, and how we can protect America's seniors and those with private health insurance and the employers who offer it."

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