The FEHBlog listened yesterday to an interesting discussion of the President’s executive order placing a cap on regulatory costs on the economy. It’s known as the one rule in, two rules out order. A George Washington University professor and the former head of the Britain’s regulatory office spoke. The British guy spoke because Britain has had a one in, two rule for many years and the rule is so appreciated that it’s been upped to a one in, three out rule. The professor noted that the Office of Management and Budget had issued guidance on the order last week. The order applies to significant regulatory actions, meaning that the action has an impact of $100 million or more on the national economy. The professor explained that while agencies must engage in cost-benefit analysis before issuing such a significant rule, they rarely go back to verify the analysis. Every President since Jimmy Carter has asked agencies to engage in this exercise. This order will force agencies to take a look back. In other words, the order at least taps the breaks on regulatory actions. Te British guy explained that the one in two out approach encouraged agencies to work more closely with the regulated community.
There are not many regulatory actions that OPM takes which have a significant effect on the national economy in the FEHBlog’s recollection. But there are many Affordable Care Act rules which fall into that category. Earlier this morning, the Senate confirmed Dr. Tom Price as Health and Human Services Department Secretary. HHS is top dog for ACA, Medicare, and Medicaid regulations so it will be interesting to see what happens next.
It was no surprise to the FEHBlog that U.S. District Court Judge Amy Berman Jackson issued an order Tuesday blocking the Anthem – Cigna merger. The Wall Street Journal explains that
The decision said the proposed $48 billion deal violated federal antitrust law because it would create an unacceptable reduction in the number of companies able to serve large multistate employers that insure their workers.
The article further observes that
While Aetna is considering a possible appeal in its case, Wednesday’s ruling almost certainly kills the Anthem-Cigna transaction, as discord between the companies has grown considerably since they announced their deal in July 2015.
The FEHBlog has thought that there was a bit of Lucy yanking the football away from Charlie Brown’s kick quality in these two antitrust cases. The Affordable Care Act implicitly encouraged health care entity integration — hospitals buying up doctor groups and other facilities and insurers buying other businesses — to better integrate patient care. The article points out that
Health insurers found themselves swept up in the fever of the recent merger boom. In 2015, the industry’s major players engaged in a deal dance that ended up with four of its biggest companies paired off in ambitious bids to create a pair of behemoths with more than $100 billion in annual revenue. Both proposed new companies would still have been smaller than UnitedHealth Group Inc., however.
The Justice Department had serious concerns about the rumored insurance mergers before they were even officially announced. The insurers were aware of these concerns but hoped they could overcome them.
With Wednesday’s ruling, it was clear the gamble didn’t pay off.
Now the insurers face a landscape transformed by the recent Republican sweep into power. The Affordable Care Act could be repealed and reshaped, while the Trump administration’s antitrust approach may prove different from that of Obama officials. Analysts are already speculating that new managed-care deals may arise, perhaps even involving new configurations among the four would-be merger partners.
The FEHBlog recalls a Chinese curse — may you live in interesting times.