Kamala Harris and the Push to Cut Hosptal Bills in California

As a former state attorney general, Senator Kamala D. Harris, the Democratic nominee for vice president, has received significant scrutiny of her record on law enforcement, facing questions and criticism about uneven prosecutions of killings by police officers.

But she is less known for another role she took on, opposing the consolidation of institutions in the health care industry, which has become a major force driving the cost of medical care higher for consumers. She challenged proposed mergers between industry behemoths and anti-competitive behavior by powerful hospital systems and drug makers.

She oversaw multimillion-dollar settlements with major health care corporations like Quest Diagnostics and McKesson, which were the subjects of whistle-blower lawsuits accusing them of fraud against the state Medicaid program.

And she took the lead among state attorneys general in opposing an anti-competitive merger between a big hospital group and a large physician practice. She joined the Justice Department lawsuit that stopped two of the nation’s largest health insurers, Anthem and Cigna, from joining together.

Ms. Harris and Vice President Pence are scheduled to debate on Wednesday evening, at a time when the coronavirus pandemic has put a spotlight on access to health care, high medical bills and drug prices.

“She will be as she has historically been a very strong advocate for consumer protection,” said W. Kenneth Marlow, a health care lawyer with Waller Lansden Dortch & Davis in Nashville who represents for-profit businesses seeking to buy hospitals. If the Democrats win the White House, he predicted her presence in a Biden administration would lead to close scrutiny of health care deals.

Consolidation among major hospital systems has plateaued in recent years, but has continued at a pace that still alarms health policy experts. Recent studies including the RAND examination of prices for hospital and outpatient treatment have made the case that mergers and acquisitions have led to some mega-networks charging two-and-a-half to three times more than Medicare does for patient care.

As the California attorney general from 2011 to 2017, Ms. Harris used her powers to protect consumers and to prosecute fraud or antitrust violations in pursuit of health care industry players she accused of maximizing profits at the expense of patients.

The daughter of a medical researcher, Shyalama G. Harris, who died of cancer in 2009, Ms. Harris took on those big companies in a state with the some of the most sprawling hospital systems in the country.

The Biden campaign declined to make Ms. Harris available for an interview. A statement from Sabrina Singh, a campaign spokeswoman, said that she “had a strong track record of taking on powerful corporations and special interests on behalf of the people of California.”

As attorney general, “she decided that health care was a big priority for her,” said Richard Scheffler, a professor of health economics at the University of California, Berkeley, whose work on the effect of big health systems on prices has been cited by the attorney general’s office. He helped write an analysis of her tenure in a blog for Health Affairs, an academic journal. “A lot of A.G.’s don’t do that,” he said.

Ms. Harris’s predecessor in the job, Jerry Brown, the former governor, was among those Democratic attorneys general who did not make health care a major focus of his tenure.

Ms. Harris’s aggressive stance has drawn criticism. In a Wall Street Journal editorial last August, she was accused of preventing the sale of a hospital group to win support from a heath care union and “to punish a business she didn’t like.” The accusations were outlined in an unsuccessful lawsuit by the thwarted buyer, and the subsequent bankruptcy of the hospital group raised questions about her decision.

Concern over the lack of competition in health care markets is shared by the Trump administration, said Brian Blase, a former White House aide. During his first year in office, President Trump signed an executive order asking federal officials to look closely at hospital mergers and other actions that could lead to higher prices and less choice for consumers.

“It’s an issue that we spent a lot of time addressing and expressed significant concern about,” Mr. Blase said. Earlier this year, administration officials released a report, recommending continued oversight and eliminating state laws that require approval to build or expand medical facilities. Top health officials have also pushed for more transparency in what hospitals charge for various surgeries and services.

But Mr. Blase acknowledged that the administration’s other health care priorities, including legal efforts to overturn the Affordable Care Act and addressing high drug prices, have frequently taken precedence. Neither party has given the topic sufficient attention, he said.

The agencies charged with oversight, the Federal Trade Commission and the Justice Department, have continued to review mergers and other kinds of anti-competitive behavior, including looking at some of the same issues Ms. Harris tackled during her tenure in California. The Trump administration allowed two of the nation’s largest health insurers to combine with the largest pharmacy benefit managers, approving them despite concerns that the mergers would harm competition.

But antitrust experts say Ms. Harris’s experience could come at a particularly important time. The pandemic has inflicted significant economic damage on smaller hospitals and physician practices that may be unable to survive, resulting in a health care landscape with fewer and fewer patient options.

“These dominant players in health care markets could become even more powerful and entrenched,” said Martin Gaynor, a health economist at Carnegie Mellon University.

California’s major legal battle against hospital giant Sutter Health is often cited as an example of Ms. Harris’s record. She is credited for laying the groundwork for investigations into major hospital groups that led Xavier Becerra, the current state attorney general, to sue Sutter Health for using its power to demand higher prices and broker deals with insurers that forced them to include all of their medical centers. Mr. Becerra reached a $575-million settlement with the hospital chain last December.

Ms. Harris’s antitrust efforts also extended to drug makers. She used both federal and state courts to challenge what are called pay-for-delay agreements in which drug manufacturers pay competitors to delay the introduction of generics to replace brand-name drugs.

It is not unusual for regulators to focus on the actions of pharmaceutical companies, said Michael A. Carrier, a professor at Rutgers Law School. “State attorneys general know high prices cause all of their constituents to suffer,” he said.

Ms. Harris was involved in both federal and state legal challenges to Bayer Corporation’s agreements protecting its antibiotic Cipro. After federal cases were dismissed, Ms. Harris turned to the California Supreme Court. “California has been on the forefront on this,” Mr. Carrier said.

Her expertise could potentially shape a Biden administration stance on antitrust cases, although critics worry her close ties to the tech titans in Silicon Valley could hamper efforts to oversee those giants.

The Biden campaign has received significant contributions from the health care industry, including unions representing health care workers. He has raised some $25 million from the health care sector overall, compared to $14 million by President Trump, according to the Center for Responsive Politics, which tracks donations. Many see him as a safe bet to protect the status quo, especially during the current tumultuous period.

Ms. Harris’s oversight of hospital mergers included some criticisms that her actions against businesses were politically motivated. Prime Healthcare, a for-profit hospital operator that sought to buy hospitals owned by the Daughters of Charity Health System, sued Ms. Harris after she insisted the company consent to a series of conditions if it went ahead with the purchase.

In the lawsuit, Prime claimed that she conspired with a union to prevent the transaction so that the labor group would “financially contribute to her campaign for U.S. Senate without regard to the merits of Prime’s proposal.” The lawsuit was dismissed, and union officials say Ms. Harris acted appropriately in trying to prevent any new owners from slashing services and laying off staff. Prime subsequently settled a Justice Department lawsuit accusing it of Medicare fraud.

“Our experience with Attorney General Harris was she was an honest broker and did a good job regulating nonprofit health care systems,” said the union’s president, Dave Regan.

The company, Prime Healthcare, said in a statement, that it is “hopeful that Senator Harris will be a strong advocate for health care providers, patients and health systems while strengthening and expanding the Affordable Care Act to ensure care for all.”

The Daughters of Charity hospitals were eventually sold to a hedge fund, and the system filed for bankruptcy in 2018. Prime is buying one of the hospitals.

As a U.S. senator, Ms. Harris supported Senator Bernie Sanders’ Medicare for all legislation in 2019, although her views on abolishing private health insurance shifted during her presidential campaign to a lengthier transition to a Medicare-like program. She also co-sponsored legislation on drug pricing and introduced legislation addressing the high maternal mortality rates among Black women.

Consumer advocates say Ms. Harris played a critical role in identifying how powerful hospitals are a driver of ever-higher prices. Any administration that wants to deal with health care costs will have to tackle hospital consolidation and anti-competitive practices, said Anthony Wright, the executive director of Health Access California, a consumer group that favors strong oversight of the state’s hospitals.

“Harris was attorney general at a time when this was emerging as an issue,” he said, describing her as someone who understood how anti-competitive behavior affects consumers. “It is a very useful view from the White House or the Naval Observatory,” where the vice president resides.

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