New evidence on the impacts of cross-market hospital mergers on commercial prices and measures of quality.

OBJECTIVE: To examine the impact of "cross-market" hospital mergers on prices and quality and the extent to which serial acquisitions contribute to any measured effects. DATA SOURCES: 2009-2017 commercial claims from the Health Care Cost Institute (HCCI) and quality measures from Hospital Compare. STUDY DESIGN: Event study models in which the treated group consisted of hospitals that acquired hospitals further than 50 miles, and the control group was hospitals that were not part of any merger activity (as a target or acquirer) during the study period. DATA EXTRACTION METHODS: We extracted data for 214 treated hospitals and 955 control hospitals. PRINCIPAL FINDINGS: Six years after acquisition, cross-market hospital mergers had increased acquirer prices by 12.9% (CI: 0.6%-26.6%) relative to control hospitals, but had no discernible impact on mortality and readmission rates for heart failure, heart attacks and pneumonia. For serial acquirers, the price effect increased to 16.3% (CI: 4.8%-29.1%). For all acquisitions, the price effect was 21.8% (CI: 4.6%-41.7%) when the target's market share was greater than the acquirer's market share versus 9.7% (CI: -0.5% to 20.9%) when the opposite was true. The magnitude of the price effect was similar for out-of-state and in-state cross-market mergers. CONCLUSIONS: Additional evidence on the price and quality effects of cross-market mergers is needed at a time when over half of recent hospital mergers have been cross-market. To date, no hospital mergers have been challenged by the Federal Trade Commission on cross-market grounds. Our study is the third to find a positive price effect associated with cross-market mergers and the first to show no quality effect and how serial acquisitions contribute to the price effect. More research is needed to identify the mechanism behind the price effects we observe and analyze price effect heterogeneity.

Considerations for state-imposed conditions on healthcare provider transactions.

The widespread consolidation of health systems, hospitals, and physicians has contributed to the high price of healthcare across the United States. While federal antitrust enforcers continue to play an important role in overseeing large mergers, acquisitions, and other consolidating transactions of major healthcare providers, state oversight over healthcare markets is essential to slow consolidation more broadly and address market failures across the country. State laws govern the scope of authority held by state attorneys general and other state agencies to receive notice of, review, and approve, conditionally approve, or block healthcare provider transactions, which can significantly impact the breadth and content of oversight. While blocking potentially anticompetitive transactions can help states maintain any competitive forces that remain in the market, in some situations, approving a transaction with conditions may be the best path forward. Applying conditions to transactions may allow state officials to oversee and govern the behavior of providers post-transaction while states pursue other legislative fixes. Although the use of conditions is a relatively common practice at the state level, little research has been done to explore their use among states. Following a search in all 50 states, this paper examines decisions from state officials imposing conditions intended to address the impacts of transactions on healthcare price, access, and quality and provides recommendations for the effective use of conditions moving forward.

Do State Bans of Most-Favored-Nation Contract Clauses Restrain Price Growth? Evidence From Hospital Prices.

Policy Points Looking for a way to curtail market power abuses in health care and rein in prices, 20 states have restricted most-favored-nation (MFN) clauses in some health care contracts. Little is known as to whether restrictions on MFN clauses slow health care price growth. Banning MFN clauses between insurers and hospitals in highly concentrated insurer markets seems to improve competition and lead to lower hospital prices. CONTEXT: Most-favored-nation (MFN) contract clauses have recently garnered attention from both Congress and state legislatures looking for ways to curtail market power abuses in health care and rein in prices. In health care, a typical MFN contract clause is stipulated by the insurer and requires a health care provider to grant the insurer the lowest (i.e., the most-favored) price among the insurers it contracts with. As of August 2020, 20 states restrict the use of MFN clauses in health care contracts (19 states ban their use in at least some health care contracts), with 8 states prohibiting their use between 2010 and 2016. METHODS: Using event study and difference-in-differences research designs, we compared prices for a standardized hospital admission in states that banned MFN clauses between 2010 and 2016 with standardized hospital admission prices in states without MFN bans. FINDINGS: Our results show that bans on MFN clauses reduced hospital price growth in metropolitan statistical areas (MSAs) with highly concentrated insurer markets. Specifically, we found that mean hospital prices in MSAs with highly concentrated insurer markets would have been $472 (2.8%) lower in 2016 had the MSAs been in states that banned MFN clauses in 2010. In 2016, the population in our sample that resided in MSAs with highly concentrated insurer markets was just under 75 million (23% of the US population). Hence, banning MFN clauses in all MSAs in our sample with highly concentrated insurer markets in 2010 would have generated savings on hospital expenditures in the range of $2.4 billion per year. CONCLUSIONS: Our empirical findings suggest banning MFN clauses between insurers and providers in highly concentrated insurer markets would improve competition and lead to lower prices and expenditures.

Options for states to constrain pricing power of health care providers.

Health care is becoming increasingly unaffordable for both individuals and employers and prices vary in nearly incomprehensible ways that do not correlate with quality. In many areas, consolidation of insurers and providers resulted in market failure that needs policy interventions. With federal gridlock, state policymakers are seeking options for controlling health care costs in markets where competition has failed. In this article, we discuss a spectrum of options that policymakers have to more directly control healthcare prices: (1) establishing a cost-growth benchmark, (2) creating a public option, (3) capping or establishing a default out-of-network payment rate for health care services, (4) creating affordability standards that authorize the insurance commissioner to reject contracts with excessive rate increases, (5) creating global budgets for hospital-based care, (6) capping excessive prices and/or tiering allowed rate updates, and (7) creating a population-based payment model. We provide a roadmap for state policymakers to consider these options, review the experiences with states who have tried these models, and discuss additional design considerations that policymakers should consider with any of these models. In the 1970's and 1980's, during a time of rapid growth in health care prices and spending, states took a decisive leadership role in developing regulatory models to curb the growth in health care costs and improve affordability for their citizens. It is time for states to lead the nation once again in addressing the current health care cost and affordability crisis in the U.S.

California's Drug Transparency Law: Navigating The Boundaries Of State Authority On Drug Pricing.

The California drug transparency bill (SB-17), signed into law in October 2017, seeks to promote transparency in pharmaceutical pricing, enhance understanding about pharmaceutical pricing trends, and assist in managing pharmaceutical costs. This article examines the legal and regulatory aspects of SB-17, explores legal challenges to the law, compares it to other state efforts to address rising drug prices, and discusses how California can maximize the impact of SB-17 by coupling the law with other incentives. While SB-17 might not significantly reduce drug prices, the new law represents a meaningful step for one state seeking to negotiate the political and legal boundaries of state action to rein in drug prices.

Density-based diamagnetic separation: devices for detecting binding events and for collecting unlabeled diamagnetic particles in paramagnetic solutions.

This paper describes the fabrication of a fluidic device for detecting and separating diamagnetic materials that differ in density. The basis for the separation is the balance of the magnetic and gravitational forces on diamagnetic materials suspended in a paramagnetic medium. The paper demonstrates two applications of separations involving particles suspended in static fluids for detecting the following: (i) the binding of streptavidin to solid-supported biotin and (ii) the binding of citrate-capped gold nanoparticles to amine-modified polystyrene spheres. The paper also demonstrates a microfluidic device in which polystyrene particles that differ in their content of CH2Cl groups are continuously separated and collected in a flowing stream of an aqueous solution of GdCl3. The procedures for separation and detection described in this paper require only gadolinium salts, two NdFeB magnets, and simple microfluidic devices fabricated from poly(dimethylsiloxane). This device requires no power, has no moving parts, and may be suitable for use in resource-poor environments.

Effects of surface charge on denaturation of bovine carbonic anhydrase.

This work compares the denaturation of two proteins-bovine carbonic anhydrase II (BCA) and its derivative with all lysine groups acetylated (BCA-Ac(18))-by urea, guanidinium chloride (GuHCl), heat, and sodium dodecyl sulfate (SDS). It demonstrates that increasing the net negative charge of the protein by acetylation of lysines reduces its stability to urea, GuHCl, and heat, but increases its kinetic stability (its thermodynamic stability cannot be measured) towards denaturation by SDS. Increasing the ionic strength of the buffer improves the stability of BCA-Ac(18) to urea and heat, but still leaves it less stable than unacetylated BCA to those denaturants. In urea, the large change in electrostatic interactions not only modifies the free energy of denaturation, but also introduces a stable intermediate into the unfolding pathway. This work shows that modifications of charges on the surfaces of proteins can have a large effect--positive or negative, depending on the denaturant--on the stability of the proteins despite the exposure of these charges to high dielectric solvent and buffer ions.

Differentiation of proteins based on characteristic patterns of association and denaturation in solutions of SDS.

This paper shows that proteins display an unexpectedly wide range of behaviors in buffers containing moderate (0.1-10 mM) concentrations of SDS (complete unfolding, formation of stable intermediate states, specific association with SDS, and various kinetic phenomena); capillary electrophoresis provides a convenient method of examining these behaviors. Examination of the dynamics of the response of proteins to SDS offers a way to differentiate and characterize proteins. Based on a survey of 18 different proteins, we demonstrate that proteins differ in the concentrations of SDS at which they denature, in the rates of unfolding in SDS, and in the profiles of the denaturation pathways. We also demonstrate that these differences can be exploited in the analysis of mixtures.

Increasing the net charge and decreasing the hydrophobicity of bovine carbonic anhydrase decreases the rate of denaturation with sodium dodecyl sulfate.

This study compares the rate of denaturation with sodium dodecyl sulfate (SDS) of the individual rungs of protein charge ladders generated by acylation of the lysine epsilon-NH3+ groups of bovine carbonic anhydrase II (BCA). Each acylation decreases the number of positively charged groups, increases the net negative charge, and increases the hydrophobic surface area of BCA. This study reports the kinetics of denaturation in solutions containing SDS of the protein charge ladders generated with acetic and hexanoic anhydrides; plotting these rates of denaturation as a function of the number of modifications yields a U-shaped curve. The proteins with an intermediate number of modifications are the most stable to denaturation by SDS. There are four competing interactions-two resulting from the change in electrostatics and two resulting from the change in exposed hydrophobic surface area-that determine how a modification affects the stability of a rung of a charge ladder of BCA to denaturation with SDS. A model based on assumptions about how these interactions affect the folded and transition states has been developed and fits the experimental results. Modeling indicates that for each additional acylation, the magnitude of the change in the activation energy of denaturation (DeltaDeltaG(double dagger)) due to changes in the electrostatics is much larger than the change in DeltaDeltaG(double dagger) due to changes in the hydrophobicity, but the intermolecular and intramolecular electrostatic effects are opposite in sign. At the high numbers of acylations, hydrophobic interactions cause the hexanoyl-modified BCA to denature nearly three orders of magnitude more rapidly than the acetyl-modified BCA.

Peracetylated bovine carbonic anhydrase (BCA-Ac18) is kinetically more stable than native BCA to sodium dodecyl sulfate.

Bovine carbonic anhydrase (BCA) and its derivative with all lysine groups acetylated (BCA-Ac18) have different stabilities toward denaturation by sodium dodecyl sulfate (SDS). This difference is kinetic: BCA-Ac18 denatures more slowly than BCA by several orders of magnitude over concentrations of SDS ranging from 2.5 to 10 mM. The rates of renaturation of BCA-Ac18 are greater than those of BCA, when these proteins are allowed to refold from a denatured state ([SDS]=10 mM) to a folded state ([SDS]=0.1 to 1.5 mM). On renaturation, the yields of the correctly folded protein (either BCA or BCA-Ac18) decrease with increasing concentration of SDS. At intermediate concentrations of SDS (from 0.7 to 2 mM for BCA, and from 1.5 to 2 mM for BCA-Ac18), both unfolding and refolding of the proteins are too slow to be observed; an alternative process-probably aggregation-competes with refolding of the denatured proteins at those intermediate concentrations. Because it is experimentally impractical to prove equilibrium, it is not possible to establish whether there is a difference in the thermodynamics of unfolding/refolding between BCA and BCA-Ac18.

Eliminating positively charged lysine epsilon-NH3+ groups on the surface of carbonic anhydrase has no significant influence on its folding from sodium dodecyl sulfate.

This study compares the folding of two polypeptides--bovine carbonic anhydrase (BCA) and peracetylated BCA (BCA-Ac(18))--having the same sequence of amino acids but differing by 18 formal units of charge, from a solution containing denaturing concentrations of sodium dodecyl sulfate (SDS). Acetylation of BCA with acetic anhydride converts all 18 lysine-epsilon-NH(3)(+) groups to lysine-epsilon-NHCOCH(3) groups and generates BCA-Ac(18). Both BCA and BCA-Ac(18) are catalytically active, and circular dichroism spectroscopy (CD) suggests that they have similar secondary and tertiary structures. SDS at concentrations above approximately 10 mM denatured both proteins. When the SDS was removed by dialysis, both proteins were regenerated in native form. This study suggests that large differences in the net charge of the polypeptide have no significant influence on the structure, the ability to refold, or the rate of refolding of this protein from solutions containing SDS. This study reinforces the idea that charged residues on the surface of BCA do not guide protein folding and raises the broader question of why proteins have charged residues on their surface, outside of the region of the active site.

Influence of the Zn(II) cofactor on the refolding of bovine carbonic anhydrase after denaturation with sodium dodecyl sulfate.

This paper uses capillary electrophoresis to follow a globular metalloprotein--bovine carbonic anhydrase II (BCA, EC 4.2.1.1)--on unfolding upon treatment with sodium dodecyl sulfate (SDS) and refolding upon removal of SDS, both in the presence and the absence of its Zn(II) cofactor. This research demonstrates that the Zn(II) cofactor is not required for refolding into a nativelike conformation, does not remain associated with the unfolded protein, and does not significantly change the rate of refolding. The presence of the Zn(II) cofactor, however, does increase the total amount of recovered protein by a factor of 2. Capillary electrophoresis could distinguish between native and denatured protein, based on the difference in electrophoretic mobility between the native protein and the aggregate of denatured protein and SDS. In addition, the active site was probed by observing binding of BCA to a charged arylsulfonamide using affinity capillary electrophoresis. These studies provide a foundation for future physical-organic studies using BCA as a model to examine interactions between proteins and SDS.