Key takeaways

• Outgoing head of DOJ Antitrust Division Jonathan Kanter asserted health care consolidation has failed to deliver on promised efficiencies and outcomes.
• Kanter repeatedly compared the health care industry to Big Tech, which has been a massive enforcement target over the last four years.
• Health care entities should closely follow emerging antitrust approaches for technology and payment platforms to stay ahead of potential enforcement strategies.

On November 12, 2024, Assistant Attorney General for Antitrust Jonathan Kanter delivered prepared remarks that criticized the “platformization” of health care and called on enforcers to “fundamentally redefine” how antitrust policy applies to health care companies and associated labor markets. Given the subject matter of his speech, it is apt that Kanter spoke at Carnegie Mellon University’s campus in Pittsburgh, Pennsylvania, as Pittsburgh has long been recognized as a hub for health care, life sciences, and technology.

In his speech, Kanter painted a grim view of nearly all aspects of the U.S. health care industry, including federal Medicare programs, and argued that many of the procompetitive justifications for consolidation ultimately have resulted in “less competitive, less efficient and more wasteful” outcomes for patients and payors. Kanter criticized the interference of “corporate middlemen” in the delivery of care, which he asserted results in worse patient outcomes, higher prices, disillusioned providers, and stagnant wages for health care workers. Moreover, Kanter drew parallels between “Big Tech” and the emergence of “Big Healthcare platforms,” which he characterized as similar in terms of moat-building (i.e., the need for multi-level entry in order to compete against vertically integrated rivals); conflicts of interest (i.e., steering, self-preferencing, and other forms of exclusivity); and regulatory gamesmanship (i.e., the circumvention of medical-loss ratio requirements on insurers through increased spending among integrated affiliates).

Focusing on how antitrust enforcers can combat this so-called “platformization,” Kanter emphasized the need to look beyond the rigid paradigms of traditional antitrust analysis, which historically have focused on simplistic models and discrete horizontal or vertical market definitions (e.g., provider markets or insurer markets), without considering the broader competitive interplays. Kanter emphasized that this approach, which he likened to playing “Healthcare Tetris,” was insufficient to address the real-word complexities of the health care industry.

What does this mean for the health care industry – especially for major players who may be considering expansion and/or acquisitions in 2025? We offer the following observations:

• First, the bulk of Kanter’s remarks were likely prepared in advance of the election. To the extent that this speech previewed new priorities in a Harris administration, Kanter acknowledged that his time overseeing the DOJ’s Antitrust Division would soon be over. However, even though enforcement priorities will no doubt shift under a second Trump administration, we do not expect health care antitrust enforcement to die on the vine. Indeed, the more populist wing of the Republican party may see certain areas of the health care industry (e.g., pharmaceuticals) as appealing targets for continued antitrust activity.
   
• Second, the antitrust analysis of multisided markets and platforms continues to evolve, and we expect that evolution to continue during the Trump administration. Kanter posited that in the not-so-distant future, “a few integrated health care platform stacks will amass a generational hold over health care,” much like we have seen in Big Tech. Integrated health care entities should closely follow antitrust developments in payment platforms, app stores, social media ecosystems, and ecommerce marketplaces to stay ahead of the enforcement curve. 
   
• Third, antitrust risks faced by the health care industry will remain high even if the Trump administration adopts a lighter enforcement touch. States retain broad enforcement powers over provider and payor acquisitions, and private parties will continue to file civil actions. In particular, new AI-based technology stacks may run afoul of price-fixing and other per se prohibitions under federal and state antitrust law.

For more information, please reach out to the authors.