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The Keckley Report

The FTC will be Healthcare’s Biggest Headache until 2025

By May 16, 2022March 1st, 2023No Comments

In healthcare, the event potentially most consequential to consumers for at least the next 3 years happened last week—the Senate confirmation of Alvaro Bedoya to the Federal Trade Commission. The addition of the 40-year old attorney, professor and digital privacy expert gives Democrats a 3:2 majority at a critical time as inflation and economic anxiety portend landslide losses in their November campaign.

If as expected, Democrats lose big in November losing control of the House and Senate, they’ll have few cards to play until Campaign 2024. The FTC is likely to be that card.

Background: The mission of the FTC “is protecting consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education without unduly burdening legitimate business activity.” It’s been around since 1914, and “owns” consumer protection in Federal Government sometimes partnering with other agencies/departments or using its investigative authority under Section 6(b) of the Federal Trade Commission Act to bring actions against violators.

It is led by five Commissioners, nominated by the President and confirmed by the Senate, each serving a seven-year term. No more than three Commissioners can be of the same political party. The President chooses one Commissioner to act as Chair. President Biden chose Lina Khan to be its Chair: she was sworn in June 15, 2021; Bedoya the founding director of the Center on Privacy and Technology at the Georgetown University Law Center, joins Democrat Rebecca Kelly Slaughter and Khan along with Republicans Christine Wilson and Noah Joshua Phillips. In other words, regardless of mid-term elections, Democrats will hold a majority in the FTC until January 2025: they can do a lot with its relatively small budget ($351 million in FY21) and staff (1200). Issues related to competition and consumer protections loom large in healthcare and are sure to get its attention.

Recent Healthcare Attention by the FTC: Since the Biden administration has stepped in, the healthcare focus for FTC actions has not been significantly dissimilar to the Trump team’s handling of issues. In the past year, it has stepped up its scrutiny of vertical and horizontal consolidation (PBMs, hospitals, health plans, medical groups), price transparency (hospitals, physicians, insurance, diagnostic labs), advertising claims (nutritional supplements, prescription drugs) and consumer protections including equity and access.

My take:

With a Democratic majority now in place, the FTC will increase its activism in each of these areas as they’re popular with voters and problematic for Republican opponents thought to be too friendly to corporate healthcare interests.  

Every healthcare organization should brace for heightened transparency and regulatory scrutiny prompted by an activist FTC. That means independent board members will be liable for oversights and willful noncompliance and management teams will be held to a higher level of accountability. That means increased fines for non-compliance and calls for major reforms. That means the FTC will be a headache to healthcare until 2025.

Get ready.


PS: Tomorrow, voters head to the polls for primary elections in Idaho, Kentucky, North Carolina, Oregon and Pennsylvania. Healthcare issues per se are not major items on the campaign circuits in these states this year other than the abortion debate. The majority of voters prefer a health system that’s private, competitive, affordable, equitable and easy to use: the majority don’t think they’re getting it. But thus far in Campaign 2022, healthcare reform aka the Affordable Care Act or Medicare for All have not surfaced as campaign issues. Stay tuned.


US Federal Trade Commission

Remarks of Chair Lina M. Khan Regarding the 6(b) Study on Pharmacy Benefit Managers Commission File No. P221200

FTC Acts to Protect Patients Who Rely on Medical Instruments Used in Sinus Procedures FTC May 10, 2022


The Leapfrog Group Spring 2022 Report: The Leapfrog Group conducted an analysis of 2,844 U.S. hospitals. Findings:33% earned an “A” grade for patient safety 24% B, 36% C, 7% D and 1% F (17 hospitals).

Leapfrog Group

Study: CMS hospital star ratings change as methodology changes: Researchers analyzed the changes in hospital ratings and rankings associated with alternative methodological choices in the calculation of the 2021 CMS Hospital Compare star ratings using publicly available 2021 Hospital Compare data for 3339 US hospitals from the October 2020 data release. Findings:

·        Of the specific changes to current specifications considered, the alternative method of standardization was associated with the most substantial changes, with 55.4% (95% CI, 53.7%-57.1%) of hospitals having their star rating reclassified.

·        The change in domain weights was associated with the smallest differences, but even that resulted in reclassification of the star rating in approximately 1 in 4 (24.5%; 95% CI, 23.0%-26.0%) hospitals.

“CMS Hospital Compare star ratings were found to be highly sensitive to how performance ratings are calculated, demonstrating the need for transparent justification of the technical approaches used in calculating composite performance ratings.”

Barclay et al Concordance of Hospital Ranks and Category Ratings Using the Current Technical Specification of US Hospital Star Ratings and Reasonable Alternative Specifications JAMA Health Forum May 13, 2022. 2022;3(5):e221006. doi:10.1001/jamahealthforum.2022.1006

 Kaufman Hall: contract labor costs spike in 1Q 2022: Contract labor made up 2% of hospitals’ total labor expenses in 2019 and 2020, increasing to 6% in 2021 and 11% during the opening quarter of 2022.Between 2019 and March 2022, the median labor expense per adjusted discharge rose 37% from $4,009 to $5,494. Median hourly wage rates for contract workers increased slightly during the pandemic’s first year from $64 in 2019 to $71 in 2020 but shifted further upward to $103 in 2021 and $132 in the beginning of 2022.

A Special Workforce Edition of the National Hospital Flash Report Kaufman Hall May 11, 2022

Study: hospital margins shrank in 2020: In this cross-sectional study of 2163 US hospitals, a sizeable reduction in the operating margins of US hospitals was found in 2020. However, their overall profit margins remained similar to those in prior years, and government, rural, and smaller hospitals generated higher overall profit margins during 2020 than in prior years.

·        Among the 1378 hospitals with fiscal years beginning in January, the mean operating margin declined from –1.0% in 2019 to –7.4% in 2020.

·        The mean share of other nonoperating income grew from 4.4% in 2019 to 10.3% in 2020.

·        The mean overall profit in 2020 (6.7%; 95% CI, 5.4% to 8.1%) remained as stable as prior years.

·        Government, rural, and smaller hospitals showed higher mean overall profit margins in 2020 than in 2019 (7.2% vs 3.7%, 7.5% vs 1.9%, and 6.7% vs 3.5%, respectively). These results remained consistent when hospitals whose fiscal years began in July were examined.

Wang et al COVID-19 and Hospital Financial Viability in the US JAMA Health Forum. May 13, 2022;3(5):e221018. doi:10.1001/jamahealthforum.2022.1018

OIG Study: 26% of Medicare patients experience harm during hospital stays: according to the report from the HHS Office of Inspector General (OIG):

·        Among the roughly 1 million Medicare patients who were discharged from hospitals in October 2018, a total of 258,323 (26%) experienced an adverse or temporary harm event during their stay.

·        12% experienced events that led to longer stays, lifesaving interventions, permanent harm, or death. Of these adverse events, 45% were said to have been preventable.

·        10% of adverse events contributed to patient deaths, translating to 1.4%, or 14,800 patients, during the 1-month study period.

·        13% of patients experienced temporary harm, which required intervention but did not prolong their hospital stay or require life-sustaining measures, and over 40% were determined to be preventable.

Adverse Events in Hospitals: A Quarter of Medicare Patients Experienced Harm in October 2018 HHS Office of the Inspector General  May 2022, OEI-06-18-00400

Care Management

Study: Majority of young adults with depression diagnosis go untreated: Researchers asked young adults aged 18 to 25 years with a 12-month major depressive episode (MDE) whether they had received any mental health treatment in the past year; those who responded “no” were further surveyed about reasons why they did not seek treatment.

·        Between 2011 and 2019, 11, 186 of 21, 012 young adults with a 12-month MDE did not receive any treatment, among whom 6837 (61.1%) were women, 4349 (38.9%) were men, 4412 (39.4%) were aged 18 to 21 years, 6283 (56.2%) were White, 3309 (29.6%) had an annual household income of less than $20 000, and 6363 (56.8%) had MDE-related severe functional impairment.

·        In 2019, the most-reported reasons by young adults for not seeking treatment for an MDE were cost (54.7%); weighted percentage), not knowing where to go for services (37.8%) belief they could handle the problem without treatment (30.9%); and fear of being committed or having to take medicine (22.8%).

Lu et al Examination of Young US Adults’ Reasons for Not Seeking Mental Health Care for Depression, 2011-2019JAMA Network Open May 10, 2022

Study: BMI screening threshold for diabetes varies by ethnicity:  Racial/ethnic minority populations in the United States have increased rates of diabetes compared with White populations. The 2021 guidelines from the U.S. Preventive Services Task Force recommend diabetes screening for adults aged 35 to 70 years with a body mass index (BMI) of 25 kg/m2 or greater. A logistic regression model was used to estimate diabetes prevalence at various BMIs for White, Asian, Black, and Hispanic Americans. Findings:

·        Among adults aged 35 years with a BMI of 25 kg/m2, the prevalence of diabetes in Asian Americans (3.8% [2.8% to 5.1%]), Black Americans (3.5% [2.7% to 4.7%]), and Hispanic Americans (3.0% [2.1% to 4.2%]) was significantly higher than that in White Americans (1.4% [, 1.0% to 2.0%]).

·        Compared with a BMI threshold of 25 kg/m2 in White Americans, the equivalent BMI thresholds for diabetes prevalence were 20 kg/m2 (range, <18.5 to 23 kg/m2) for Asian Americans, less than 18.5 kg/m2 (range, <18.5 to 23 kg/m2) for Black Americans, and 18.5 kg/m2 (range, <18.5 to 24 kg/m2) for Hispanic Americans.

Aggarwal et al Diabetes Screening by Race and Ethnicity in the United States: Equivalent Body Mass Index and Age Thresholds Annals of Internal Medicine May 10, 2022

Study: obsesity correlates to household income:  In 2015-2016, obesity prevalence in the United States was 18.5% among youth aged 2 to 19 years with a higher prevalence among youth living in neighborhoods with higher (vs lower) socioeconomic disadvantage. Researchers analyzed the association of a program designed to subsidize supermarkets in underserved areas with public school students’ weight status in New York City. Findings: decreases in both body mass index z score and the likelihood of obesity were significant among students who resided within 0.50 miles of a subsidized supermarket compared with students who resided further away but still in eligible areas.

Rummo et al Association Between a Policy to Subsidize Supermarkets in Underserved Areas and Childhood Obesity Risk JAMA Pediatrics May 9, 2022. doi:10.1001/jamapediatrics.2022.1153


Axios Poll: 56% of women 18-29 say they would get an abortion even if it were illegal: other findings: Axios surveyed 813 people ranging between 18 to 29 between May 5 and 8. Findings:

·        34% said they would have the baby in the event abortion was illegal, while 10% said they’d attempt to end the pregnancy at home.

·        49% of all respondents said abortion should be legal in all cases, 27% said it should be legal in most cases, 16% said it should be illegal in most cases and 8% said it should be illegal in all cases.

Axios May 10, 2022 /

Study: Proximity to abortion services key to use: Researchers analyzed the association of distance to the nearest abortion facility with abortion or pregnancy outcome using data from the Google Ads Abortion Access study, a prospective cohort study of individuals considering abortion recruited between August 2017 and May 2018. baseline and 4-week follow-up surveys. Findings:

·        Among 1485 pregnant individuals considering abortion who completed the baseline survey and provided contact information, 1005 individuals completed follow-up (follow-up rate, 67.7%) and 856 participants were included in the analytic sample (443 individuals ages 25-34 years [51.8%]; 208 Black individuals [24.3%]; 101 Hispanic or Latinx individuals [11.8%], and 468 White individuals [54.8%]).

·        Most participants reported at least 1 distance-related barrier (763 individuals [89.1%]), with a mean of 3.3 barriers (3.2-3.5 barriers) reported. For 7 of 8 distance-related barriers, an increased percentage of participants living farther from an abortion facility reported the barrier compared with participants living less than 5 miles from a facility.

This study found that greater distance from an abortion facility was associated with delays in obtaining abortion care and inability to receive abortion care. These findings suggest that innovative approaches to abortion provision may be needed to mitigate outcomes associated with long distances to abortion facilities.”

Pleasants et al Association Between Distance to an Abortion Facility and Abortion or Pregnancy Outcome Among a Prospective Cohort of People Seeking Abortion Online JAMA Network Open May 13, 2022;5(5):e2212065. doi:10.1001/jamanetworkopen.2022.12065

Survey: access to abortion residency training: Researchers analyzed all accredited U.S. obstetrics and gynecology residency programs to assess how these programs and trainees are currently located in states projected to ban abortion if Roe v Wade is overturned. Findings:

·        Of 286 accredited obstetrics and gynecology residency programs with current residents, 128 (44.8%) are in states certain or likely to ban abortion if Roe v Wade is overturned.

·        6,007 current obstetrics and gynecology residents, 2,638 (43.9%) are certain or likely to lack access to in-state abortion training.

Vinekar et al Projected Implications of Overturning Roe v Wade on Abortion Training in U.S. Obstetrics and Gynecology Residency Programs Obstetrics & Gynecology: April 27, 2022 – Volume – Issue – 10

Insurance Coverage

KFF: Between 5.3 million and 14.2 million low-income people could lose Medicaid coverage after emergency ends. Total Medicaid/CHIP enrollment jumped by 15.7 million through January, most of which the KFF researchers attribute to the lack of churn from people phasing in and out of public insurance. Still, whenever the emergency, in effect through mid-July 2022, lifts, a large share of non-elderly adults and children could lose coverage, even if many continue to be eligible

Kaiser Family Foundation

Study: Less than a fourth of physicians provide Medicaid patient care: Researchers analyzed data from 2015–17 in 4states to assess the level of Medicaid participation among physicians listed in the provider network directories of each managed care plan. Findings:

·        One-third of outpatient primary care and specialist physicians contracted with Medicaid managed care plans in our sample saw fewer than ten Medicaid beneficiaries in a year.

·        Care was highly concentrated: 25% of primary care physicians provided 86% of the care, and 25%of specialists, on average, provided 75% of the care.

Ludomirsky et al In Medicaid Managed Care Networks, Care Is Highly Concentrated Among A Small Percentage Of Physicians


Survey: inflation seen rising: Respondents to a poll by the New York Fed see inflation rising by 3.9% three years from now, up from a 3.7% rise they predicted in the March survey. Meanwhile, respondents believe inflation one year from now will rise by 6.3%, down from March’s 6.6% level.

The expected rise of gasoline prices a year from now hit 5.2%, a sharp drop from the 9.6% rise seen in March. Food and medical care costs 12 months from now were seen up by a smaller degree relative to the prior month, while the 10.3% increase seen for rent was the highest reading in a report that goes back to 2013. Home-price increases a year from now held steady at an expected 6% gain.

In the report, the New York Fed said survey respondents “remained positive about their labor market prospects, with earnings growth expectations stable at its series high and job loss expectations hovering near its series low.” It said household spending expectations hit a new high in April, even as expectations about future access to credit worsened to its worst reading since the survey started in 2013.

Longer-Term Inflation Expectations Rose in April, Says New York Fed Wall Street Journal May 9, 2022


Study: consumer sentiment at 11-year low: A preliminary Friday reading of the University of Michigan Consumer Sentiment’s tracker shows that consumer sentiment fell to 59.1 in May, reaching its lowest point since August 2011. That’s a dip from 65.2 in April, when Americans suddenly started to feel a whole lot better about the economy.

The biggest concern for Americans is inflation. 36% of consumers surveyed by the University of Michigan said their negative outlook stemmed from inflation. To their credit, there’s plenty to worry about. Data published Wednesday showed prices for common goods and services climbing 8.3% in the year through April. While that reflected slightly slower inflation than in March, it still came in above economists’ forecasts and marked the second-fastest price growth since 1981. 

Inflation Fears Send Consumer Sentiment Sharply Lower In Early May University of Michigan May 14, 2022 Inflation Fears Send Consumer Sentiment Sharply Lower In Early May | Seeking Alpha


Study: REIT activity in healthcare growing: In 2021, REITs owned more than $3.5 trillion in US assets including health care. Generally the transaction involves a 10-year, triple net lease in which the tenant is responsible for facility rent, maintenance, insurance, and taxes. Researchers found…

·        In 2021, REITs owned 197 (3%) of all hospitals and 1870 (12%) of all skilled nursing facilities.

·        Some of the characteristics most strongly associated with REIT ownership were for-profit status and urban status

Bruch et al Trends in Real Estate Investment Trust Ownership of US Health Care Properties JAMA Health Forum. 2022;3(5):e221012. doi:10.1001/jamahealthforum.2022.1012