Antitrust in Health Care

Background

Federal antitrust laws protect open competition in economic markets. Antitrust laws reflect the general principle that competition produces high-quality goods and services at the lowest price. In recent years, courts have clarified that these laws apply to entities involved in the delivery of health care, and the Department of Justice and the Federal Trade Commission have published guidelines for applying antitrust laws and principles to the health care market. The guidelines in part grew out of physicians’ and hospitals’ complaints that antitrust laws prevented them from pursuing collaborative efforts that could result in more, not less, cost-effective health care. The guidelines clarify the differences between legal, competitive collaboration and illegal, anticompetitive collaboration. The guidelines show an understanding of the dynamics of the health care market, as do the enforcement actions the agencies have taken.

Some fear that accountable care organizations and other new service delivery models will encourage physician practice consolidation and hospital mergers. While consolidation and mergers may lead to greater efficiency they also have the potential to create monopolies that would limit competition and lean to an increase in medical care costs. Alternatives to antitrust regulation and enhanced oversight are needed to discourage anticompetitive practices.

ANTITRUST IN HEALTH CARE: Policy

Legislation

In this policy: FederalState

Health care providers and their activities must not be exempt from federal antitrust statutes unless and until a need for such exemptions is clearly demonstrated.

The government must prevent powerful vertically integrated systems and very large clinical practices from creating monopolies that would limit competition and raise medical care costs.

Antitrust regulators should work closely with state and federal agencies responsible for oversight of health care professionals and institutions to use their collective authorities to minimize health care price growth and to ensure the long-term affordability of health care services.