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February 25, 2015 Workshop Transcript: Examining Healthcare Competition

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February 25, 2015 Workshop Transcript: Examining Healthcare Competition February 25, 2015 Workshop Transcript: Examining Healthcare Competition Hosted by the Federal Trade Commission and U.S. Department of Justice, Antitrust Division February 25, 2015 Constitution Center Auditorium 400 7th St SW Washington, DC 20024 Table of Contents [Video 1 of 4] Welcoming Remarks and Announcements: Caroline Holland (DOJ)……………………...……….4 Opening Remarks: Assistant Attorney General William Baer (DOJ)………………………………5 Early Observations Regarding Accountable Care Organizations………………………...…...10 Panel Discussion Moderators: Ellen Connelly (FTC), Matthew Mandelberg (DOJ) Panelists: Alison Fleury (Sharp HealthCare), Kristen Miranda (Blue Shield California), David Muhlestein (Leavitt Partners, LLC), Hoangmai Pham (CMMI), Terri Postma (CMS), Simeon Schwartz (WESTMED Medical Group) [Video 2 of 4] Alternatives to Traditional Fee-for-Service Payment Models…………………………………40 Panel Discussion Moderators: Karen Goldman (FTC), John Wiegand (FTC) Panelists: Michael Chernew (Harvard Medical School), Suzanne Delbanco (Catalyst for Payment Reform), R. Adams Dudley (UC San Francisco), Mark Friedberg (RAND Corporation), Bruce Landon (Harvard Medical School), Lisa McDonnel (UnitedHealthcare), Dana Safran (Blue Cross Blue Shield of Massachusetts) [Video 3 of 4] Trends in Provider Consolidation…………………………………………………………….…77 Panel Discussion Moderators: Patrick Kuhlmann (DOJ), Danica Noble (FTC) Panelists: Robert Burns (University of Pennsylvania), Leemore Dafny (Northwestern University), Martin Gaynor (Carnegie Mellon University), Kenneth Kizer (UC Davis Health System), James Landman (Healthcare Financial Management Association), Joe Miller (AHIP) [Video 4 of 4] Summation Roundtable: Antitrust Perspectives on Evolving Provider and Payment Models …………..111 Panel Discussion Moderators: Tara Koslov (FTC), Leslie Overton (DOJ) 2 Panelists: Mark Botti (Squire Paton Boggs LLP), Martin Gaynor (Carnegie Mellon University), Thomas Greaney (Saint Louis University), Dionne Lomax (Mintz Levin Cohn Ferris Glovsky and Popeo, PC), Mark McClellan (The Brookings Institution), Monica Noether (Charles River Associates) Closing Remarks: Marina Lao (FTC), Robert Potter (DOJ)…………………………………….136 3 [START OF WORKSHOP, DAY 2] WELCOME REMARKS AND ANNOUNCEMENTS Caroline N. Holland, Chief Counsel for Competition and Intergovernmental Relations, U.S. Department of Justice, Antitrust Division CAROLINE HOLLAND: Good morning. My name is Caroline Holland, and I'm chief counsel for Competition Policy and Intergovernmental Relations at the Antitrust Division at the Department of Justice. On behalf of my colleagues and the Antitrust Division and the Federal Trade Commission, I'm delighted to welcome you to the second day of our workshop examining health care competition. We appreciate all of you being here in person today and we thank the FTC's tech team for enabling the webcast to make the program accessible to a much wider audience. Staff from the Antitrust Division and the FTC have put together another excellent round of panels today to examine recent developments related to health care provider organization and payment models. Thank you to our panelists for sharing their deep knowledge and understanding of health care and competition. We appreciate the time and the effort you put in to making this workshop possible. And we look forward to hearing from you. The public record for this proceeding will remain open through April 30, and we encourage interested parties to submit public comments, especially if the workshop triggers new ideas or discussions. In addition, all the workshop materials will be available online. Before we get started with our substantive program, I need to review a few administrative details. Please silence any mobile phones and other electronic devices. If you must use them during the workshop please be respectful of the speakers and your fellow audience members. Please be aware that if you leave the Constitution Center building during the workshop you will have to go back through security screening again. Please bear this in mind and plan accordingly, especially if you're participating in a panel so that we can do our best to remain on schedule. Most of you have received a lanyard with a plastic FTC event security badge. We re-use these for multiple events, so please when you leave for the day return your badge to event staff. If an emergency occurs that requires you to leave the conference center, but remain in the building, please follow the instructions on the PA system. And if an emergency occurs where we need to leave the building an alarm will sound, and everyone should leave the building in an orderly manner through the main 7th Street exit. After leaving the building, turn left and proceed down 7th Street across E Street to the FTC emergency assembly area. Remain in the assembly area until instructed to return to the building. If you notice any suspicious activity, please alert the building security. And please be advised that this event may be photographed, webcast, or recorded. By participating in this event you are agreeing that your image and anything you say or submit may be posted online indefinitely at the ftc.gov or justice.gov, or any of the Commission’s or Antitrust Division's publicly available social media sites. We've provided a table outside where speakers and attendees are able to leave copies of handouts 4 or any other materials that might be of interest. Please note that the FTC and DOJ do not endorse these materials. We're just providing the table as a courtesy. Restrooms are located in the hallway just outside of this auditorium, and as a reminder lunch is on your own both days. The Plaza East cafeteria is inside this building. It's open until 3:00 PM with a brief closure from 11:00 to 11:30. No food or beverages are allowed in this room, so please plan accordingly. I'd also like to say a quick note about our use of webcasting, social media, and our Q&A process. We have done our best to get speaker materials loaded ahead of time. So they're available for webcast viewers. If any materials are not accessible we'll post them as soon as possible after the workshop. For those of you on Twitter, FTC staff will be live tweeting today's event at #FTChealthcare. We also have comment cards here in the conference room, and audience members will be able to submit questions or comments for each panel. During each session workshop staff will collect cards and bring them up to the moderators. We'll also monitor Twitter and the workshop email for any additional questions that you'd like to submit. Time permitting, moderator's will select some questions for the panelists. In the unlikely event that we get to all of the questions, please still submit them so that we can review them and continue our research and inquiry. If anyone has any questions throughout the day, please feel free to ask any of our conference staff, including our wonderful paralegals at the registration desks. And now to open today's workshop, I am honored to introduce Assistant Attorney General Bill Baer. Bill was sworn in as Assistant Attorney General on January 3, 2013. Prior to his appointment he was a partner and the head of the Antitrust Practice Group at Arnold and Porter here in Washington D.C. Earlier in his career he was the director of the Bureau of Competition at the Federal Trade Commission. Please join me in welcoming Assistant Attorney General Baer. [APPLAUSE] OPENING REMARKS William J. Baer, Assistant Attorney General, U.S. Department of Justice, Antitrust Division BILL BAER: Good morning, everybody. Caroline, thank you. I know because you now work for me as Chief Counsel for intergovernmental relations and other things, having joined us recently from Senate Judiciary Committee, she needs to say she's honored to introduce me, but I like it nevertheless. And I appreciate it. Look, thank you all for coming here. I know Caroline was saying just as I came in I take it that in addition to terrific attendance yesterday and today that we've had as many as 1,300 people accessing the webcast. The IT guys were telling me on the way in. It's fabulous. I want to thank those folks at DOJ and FTC who planned it, and the FTC folks for making sure we broadcast this out to as wide a network as possible. These workshops which FTC and DOJ have done jointly really help us step back and take a look at the evolution of policy and competition policy in particular areas. In health care for us to act effectively as enforcers and advocates we need to understand. We need to step back on occasion. 5 This workshop provides us an opportunity to hear from a number of experts, practitioners, experts about the challenges the industry is facing and about the role of competition policy. And, helping sort this all out. Yesterday I know a number of people talked about the importance of health care that we’re close to spending that will top $3 trillion when we total up the numbers for 2014. We talk about the rising cost, and while we have seen, I think- and I've got a chart or two in my prepared remarks- a nice decrease in the average annual increase in the cost of health care, those numbers in terms of the annual total cost keep going up, and at 16 percent or 17 percent of the gross domestic product, it is something we will need to continue to pay close attention to. The Affordable Care Act, passed in 2010, has accelerated some of the changes you were talking about yesterday. And today stakeholders are working to focus on cost and ways of improving health outcomes while disciplining costs. Yesterday there was a lot of discussion about the health insurance markets, specifically in the marketplaces the Affordable Care Act created. There appear to be some promising developments in competition as people develop and strengthen their networks.
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