Antitrust

Background

Federal antitrust laws protect open competition in economic markets. Antitrust laws reflect the general principle that competition produces the highest-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 federal enforcement agencies (namely, 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, 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.

Alternatives to antitrust regulation and enhanced oversight are needed to discourage anticompetitive practices.

Antitrust: Policy

Legislation

In this policy: FederalState

AARP opposes exempting health care providers and activities from federal antitrust statutes until a need for such exemptions is clearly demonstrated.

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.