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What We’re Reading: FTC Noncompete Ban Finalized; Unchecked Hospital Mergers Raised Health Costs; H5N1 Bird Flu Virus Particles Found

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The Federal Trade Commission's (FTC's) vote to ban most employers from issuing and enforcing noncompete clauses could have varying impacts on the health care workforce; federal regulators vastly under-enforced antitrust laws in the hospital sector during the last 2 decades, resulting in increased health costs; the FDA recently found genetic evidence of the H5N1 bird flu virus in pasteurized commercially purchased milk.

Legal Challenge Looms After FTC Finalizes Noncompete Ban

The Federal Trade Commission's (FTC's) vote to ban most employers from issuing and enforcing noncompete clauses could have varying impacts on the health care workforce, according to Modern Healthcare. Noncompete agreements were used in about 40% of physician employment contracts to restrict employees from working in a specific geographic area or for a rival organization; such provisions are also common in the insurance and pharmacy benefit manager industries. Previously, noncompete agreements were governed by various state laws. Under the FTC’s final rule, employers are prevented from issuing noncompete agreements for new hires and from enforcing them in existing contracts, the only exception being senior executives. The FTC estimates the rule will reduce spending on physician services by up to $194 billion over the new decade, boost wages by up to $488 billion over the next decade, and create 8500 jobs per year. This rule is set to take effect 120 days after it is published in the Federal Register, but implementation may be delayed by litigation as organizations are expected to sue to block the regulation; the US Chamber of Commerce is expected to file a lawsuit to block the rule, and some employers may do the same.

Unchecked Hospital Mergers Increased Health Costs

A recent study published in the American Economic Review reported that federal regulators vastly under-enforced antitrust laws in the hospital sector during the last 2 decades, resulting in increased health costs, according to Axios. The researchers found that the FTC only took enforcement action against 13 (1%) of the 1164 acute-care hospital mergers between 2002 and 2020. As a result, health care prices increased at least 5% between 2010 and 2015 due to mergers that the FTC could have flagged as anticompetitive. More specifically, based on the agency’s tools for screening mergers that could reduce competition and raise prices, the FTC could have flagged 238 (20%) mergers. In particular, mergers in rural and lower-income regions increased hospital prices more than those in other regions, furthering health inequities. The researchers attributed this lax enforcement to the underfunding of the FTC as its average annual enforcement budget between 2010 and 2015 was $136 million. Meanwhile, during that same period, hospital mergers raised health spending for privately insured people by $204 million on average.

FDA Says Commercial Milk Supply Appears Safe Despite H5N1 Bird Flu Virus Particles Found in Pasteurized Milk

The FDA announced Tuesday that it found genetic evidence of the H5N1 bird flu virus in pasteurized commercially purchased milk, according to Stat. However, the testing, done by polymerase chain reaction (PCR), cannot distinguish between live virus or virus fragments that could have been killed during the pasteurization process. The FDA explained that it has been trying to grow virus from milk found to contain evidence of H5N1 as that is the best way to see if there is viable virus in a product. The FDA said it believes that the pasteurization process very likely inactivates H5N1, and that commercial, pasteurized milk is safe to consume. However, their statement did not indicate if the testing suggested the amounts of viral genetic material in the milk were high or low; it also did not reveal if the milk products were purchased where outbreaks have occurred or elsewhere. To answer these questions and beyond, the FDA said it is testing milk from store shelves and the processing system to produce a large representative national sample of the milk supply, which could help to construct a more robust picture of H5N1’s spread national spread among dairy cows.

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