There is an interesting story developing on antitrust enforcement and collaboration between hospitals and doctors encouraged by the new health care law. The New York Times reports:
An influential Republican member of the Federal Trade Commission, J. Thomas Rosch, said that without “vigorous antitrust enforcement,” the new alliances of health care providers could reduce competition and increase costs to consumers. Mr. Rosch set forth his concerns in private letters to the White House and the federal Medicare agency. The letters, obtained by The New York Times, reveal a struggle between the Justice Department and the commission over who should police the market.
The Rosch letter purportedly asserts that ““The creation and operation of accountable care organizations potentially conflict with the antitrust laws … . The Supreme Court long ago prohibited competing providers from jointly contracting to provide their services, except in specified circumstances.”
David Balto (Center for American Progress) describes the FTC position on collaboration between hospitals as “unreasonable skepticism.” The Times also reports that the FTC and DOJ are trying to work out a joint policy statement on the issue:
Officials of the two agencies, which normally share responsibility for enforcing antitrust laws, are trying to devise a joint statement explaining how they will evaluate proposed collaborations by doctors and hospitals. The agencies said, in response to questions, that their goal was to have one consistent policy, but they refused to give details of their talks.
Apparently, the letter spurred this response from nine senators encouraging collaboration and shared jurisdiction between the agencies.
And while we’re on Obamacare, though on a completely unrelated note, MIT economist Jonathan Gruber will be releasing a comic book to explain the misunderstood virtues of the bill to the American public:
Gruber said he will illustrate how the president’s plan will lower health-care costs and end discriminatory insurance practices that make it much harder for sick people to get coverage. “My family made me realize that there’s such a misunderstanding of the bill, and that it’s important to explain why we need this, and what it does,” he said. “I’ve found that when people understand it, they like it.”
That is all.
Private hospitals have been enjoying local monopolies–and price gouging–for a long time. They face very little meaningful competition and therefore exercise tremendous leverage over insurance companies when negotiating claim-fees for services. As a result, only the largest insurance companies survive and ultimately it’s the consumer that pays.
Maryland has solved the problem, in part, by setting prices for procedures centrally rather than allowing private hospitals to exploit their ill-begotten leverage. Of course, rate-setting will invite the same absurd socialism rhetoric that doomed the public option (in favor of private monopolies) so it’s not likely to be politically viable, but interesting nonetheless.
See http://online.wsj.com/article/SB125288688445707403.html and here http://www.thisamericanlife.org/radio-archives/episode/391/more-is-less
So the FTC and the DOJ are disagreeing on their respective jurisdictions for antitrust enforcement. I’m SHOCKED!!!