FTC Hosts Public Workshop, “Examining Health Care Competition”

by McDermott Will & Emery

During the last several years, the Federal Trade Commission (FTC) has taken an active role in antitrust enforcement in the health care industry, particularly with respect to hospital and physician group acquisitions.  Last week, the FTC held a two-day public workshop to examine new trends and developments in the health care industry related to professional regulations of health care providers, health information technology, new care delivery models, quality measurements and pricing transparency and how those developments may affect competition.  Health care providers should anticipate increased FTC scrutiny of these trends and how they affect health care costs, quality, access and care coordination.

Last week, the Federal Trade Commission (FTC) held a two-day public workshop, “Examining Health Care Competition,” to discuss trends and developments in the health care industry and how those developments may affect health care costs, quality, access to care and care coordination.  The workshop brought together industry participants and policy experts to discuss five broad topics through a series of panels.  Specifically, the workshop focused on developments related to professional regulations, innovations in health care delivery, advancements in health care technology, measuring and assessing health care quality, and price transparency for health care services.

Key Takeaways

  • Although professional regulations, like licensure, can protect patient safety and improve quality of care, the panelists expressed concerns that some regulations may unnecessarily restrict non-physician providers from practicing to the full extent of their ability and training.  This, thereby, can suppress competition from non-physician providers, increasing health care costs unnecessarily and reducing access to care.
  • New developments in the delivery of health care, such as retail clinics and telehealth, can expand access to care while also reducing costs.  The panelists expressed concerns that regulatory barriers like state licensing requirements and reimbursement disparities may impede the growth of these new delivery models.
  • Electronic health records (EHR) and other health information technologies can increase care coordination, improve quality and lower health care costs.  However, the panelists highlighted the high costs of switching EHR systems and the lack of transparency of some EHR contract terms.  Furthermore, the panelists expressed concerns that Accountable Care Organizations (ACOs) were using EHR systems—and the lack of EHR system interoperability—as a mechanism to deter competition by keeping patient referrals within the ACO.
  • Historically, health care quality has been difficult to measure.  The panelists discussed improvements to quality measurements during the last 10 years, but also the continued difficulties of providing quality information that is meaningful and useful for both patients and providers to make accurate comparisons of providers.
  • Alongside industry efforts to measure and provide more useful quality information, the panelists discussed efforts to provide meaningful price transparency to assist consumers, payors and providers in controlling costs while maintaining quality.  However, the panelists noted difficulties providing meaningful price transparency to consumers to facilitate useful provider comparisons, including quality variation among providers of similar services, as well as concerns that increased price transparency may lead to collusion.

The FTC explained that it organized the workshop to learn more about the potential competitive implications of these new health care trends and developments.  While the FTC has notably focused a great deal of time and energy in recent years analyzing and challenging hospital and physician group acquisitions, health care providers should be mindful that the FTC is carefully studying these new trends and should anticipate increased scrutiny of any actions that may raise competitive concerns or generate complaints, especially in this time of vigorous FTC health care antitrust enforcement.

To put last week’s workshop into historical context, the FTC last examined competition in the health care industry in the early 2000s, when it conducted extensive joint hearings with the U.S. Department of Justice (DOJ) Antitrust Division.  Those hearings led the FTC and the DOJ to release a July 2004 report providing their recommendations for antitrust enforcement in the health care industry going forward.    The recommendations in that report have provided a blueprint for how the agencies have approached competition concerns in the health care industry in the decade since its issuance.

In light of this most recent workshop, the FTC may issue a new report that could similarly guide how the FTC will evaluate the competitive implications of the five topics examined.  Regardless, industry participants should not expect the FTC to waver in its focus on the health care industry as a top enforcement priority.  This is particularly true as ACOs mature and the industry and the FTC gain more experience with how ACOs form and operate.

The FTC will accept written public comments regarding the workshop discussions until April 30, 2014.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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