Why don't courts treat hospitals like tanks for liquefied gases? Some reflections on health care antitrust enforcement.

Full Abstract

In this article, I use the Federal Trade Commission and the Department of Justice 2004 report Improving Health Care:
A Dose of Competition as an occasion to comment on two specific issues that have arisen in health care antitrust:
the recent string of losses by the enforcement agencies in hospital merger cases and an antitrust exemption for physicians to bargain collectively with health insurers. One of the more salient facts about health care antitrust enforcement is the notable recent lack of success of the enforcement agencies in hospital merger cases. This may be due to judges and juries holding views of hospital markets as being different from markets for other goods and services. My conclusion is that hospitals are an industry with unique attributes, but nothing about the specifics of the health care industry suggests that the unregulated use of market power in this industry is socially beneficial. As a consequence, the antitrust laws should be enforced here as in any other industry. Countervailing power is an issue that has come to the fore in health care antitrust. Physicians have explicitly asked for legislative exemption from the antitrust laws in order to bargain collectively with insurance companies, as a means of counteracting insurers' monopsony power. It is not clear that health insurers possess significant monopsony power. Even if they do, bestowing monopoly power on physicians will not necessarily improve matters. Active antitrust enforcement in insurance markets is the correct response, not blanket exemptions for providers.

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Author information

Author/s: Gaynor, Martin (M);

Affiliation: H. John Heinz III School of Public Policy, Carnegie Mellon University, USA.

Journal and publication information

Publication Type: Journal Article; Legal Cases

Journal: Journal of health politics, policy and law (J Health Polit Policy Law), published in United States. (Language: eng)

Reference: 2006-Jun; vol 31 (issue 3) : pp 497-510

Dates: Created 2006/06/20; Completed 2006/09/26; Revised 2006/10/13;

PMID: 16785294, status: MEDLINE (last retrieval date: 12/26/2008)

Sourced from the National Library of Medicine. Abstract text and other information may be subject to copyright.

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MeSH headings (categories)

This article was linked to the MESH Headings shown below.

Government Regulation
Hospital Administration - legislation & jurisprudence
United States

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