Defending hospital mergers after the FTC's unorthodox challenge to the Evanston Northwestern--Highland Park transaction

Examining the Federal Trade Commission's retrospective challenge of a hospital merger in Illinois, the author provides an insightful analysis of one of the agency's major antitrust enforcement initiatives in health care in the last several years. Because the case produced several departures from antitrust orthodoxy, these departures may affect the trials of future hospital mergers that are challenged. The author reviews the methodology and evidence of the case, and he identifies theories and best practices that are important for administrators and legal practitioners to implement in future mergers.

Legal examination of physician advertising on the internet

The Internet provides an invaluable resource to physicians seeking to market healthcare services to consumers. No longer considered an unethical practice, physician advertising has transformed over the years into an indispensable business tool in the medical community. While the Internet creates opportunities to reach vast numbers of individuals in a timely and cost-effective manner, physicians must be vigilant in adhering to laws, rules, and regulations designed to protect the public from false and deceptive practices.

The Federal Trade Commission, clinical integration, and the organization of physician practice

This article examines Federal Trade Commission (FTC) policy--in particular, the agency's controversial 1996 statements on clinical integration--toward joint negotiations for nonrisk contracts with health plans by physicians organized into independent practice associations (IPAs) and (with hospitals) into physician-hospital organizations (PHOs). The article concludes that the policy is consistent with anti-trust principles, consistent with current thinking on the use of organized processes to improve medical care quality, specific enough to provide guidance to physicians wanting to integrate clinically, and general enough to encourage ongoing innovations in physician organization. The FTC should consider stronger sanctions for IPAs and PHOs whose clinical integration is nothing more than a sham intended to provide cover for joint negotiations, should give the benefit of the doubt to organizations whose clinical integration appears to be reasonably consonant with the statements, and should clarify several ambiguities in the statements. Health plans should facilitate IPA and PHO efforts to improve care by rewarding quality and efficiency and by providing clinically integrated organizations with claims information on individual patients. Though creating clinically integrated organizations is difficult and expensive, physicians should recognize that clinical integration can help them both to gain some negotiating leverage with health plans and to improve the quality of care for their patients.

Beyond competition: the normative implications of consumer-driven health plans

The Federal Trade Commission/Department of Justice 2004 report Improving Health Care: A Dose of Competition appeals to efficiency arguments in promoting a wide range of health care market reforms. But the market-based reforms discussed in Improving Health Care are not simply neutral with regard to equity in access to services; they are likely to have substantial and inequitable distributional effects. We use the case of consumer-driven health plans (CDHPs), the pillar of the Bush administration's private-sector health reform efforts, to illustrate the limitations of viewing health policy reform through the lens of Improving Health Care. We conclude that the speculative efficiency gains from CDHPs need to be balanced against well-documented equity concerns within a normative framework. Moreover, other important ethical issues arise with regard to the risks imposed on the population by the introduction of policies that are based on a faith in markets rather than empirical evidence.

A dose of reality: assessing the Federal Trade Commission/Department of Justice report in an uninsured, underserved, and vulnerable population context

Despite the size of their report, the Federal Trade Commission and Department of Justice pay virtually no attention to tens of millions of uninsured and underinsured persons. By focusing on an increasingly rarified group of health care customers--healthy, affluent, and highly insured--the report takes on an untethered quality, with only the slightest tip of the hat to its own limitations. Furthermore, the report overstates the extent of legal constraints on the market, in particular, the degree to which the market is free to select its customers and tailor its goods and services to the best risks. By miscasting the legal context of the American health care system, the report ultimately undermines much of its potential value.

Side effects: a dose of competition and access to care

The Federal Trade Commission and Department of Justice 2004 report Improving Health Care: A Dose of Competition argues in favor of increasing competition among health care providers. Several of the proposals within the report, however, may pose risks for access to care. The report urges that the current system of implicit cross-subsidies for indigent care be replaced with insurance expansions that provide coverage to individuals. Such a substitution would certainly enhance access, but would be very costly and likely require considerable government intervention in the health care system. In the absence of a substantial expansion in coverage, reductions in cross-subsidies could limit access to care through the existing safety net. The report argues that insurance mandates limit access to care by driving up cost and reducing choice. In some cases, such as mental health and substance abuse, however, the unregulated market may not cover a benefit at all, leaving people with less coverage and less choice. Finally, the report stresses the importance of linking costs to quality. Such a linkage is likely to lead to a health care system in which poor people obtain poor-quality care at low prices--a result that many would find disturbing.

Ready to rumble

Managed care companies have regained the upper hand in contract negotiations with hospitals--at least temporarily--thanks to a consolidation trend that is creating mega-firms with national reaches and to a surprise ruling by the Federal Trade Commission. But hospitals are exploring strategies of their own that they hope will win back leverage.