In one form or another, the Federal Trade Commission (FTC) has been banging the drum that there is no inconsistency between antitrust enforcement and healthcare. The latest to pick-up the drumbeat is the chair of the FTC herself, Edith Ramirez.
In an article appearing in the prestigious New England Journal of Medicine (NEJM) titled “Antitrust Enforcement in Health Care—Controlling Costs, Improving Quality,” Chairwoman Ramirez responds to “critics” that “question whether promoting competition should still be a central aim of the FTC’s agenda when it comes to health care markets.” Specifically, she takes aim at those who “claim that active enforcement of antitrust laws undermines efforts to contain costs through provider collaboration and is therefore at odds with the policy aims of the Affordable Care Act.” (Given NEJM’s stated goal—to “keep[] practicing physicians informed on developments that are important to their patients”—one wonders how many of those critics she is likely to convince.)
In doing so, Chairwoman Ramirez questions state legislation aimed at exempting “health care providers that engage in collaborative activity, including joint ventures and mergers, from antitrust review.” In her view, “these bills would encourage providers to negotiate collectively with health plans in order to extract higher rates, in effect allowing providers to fix their prices,” which is “conduct that would ordinarily violate antitrust laws.” Such legislation, she writes, “betrays a misunderstanding of the crucial role that competition plays in the healthcare sector.”
How does competition play a “crucial role” in the healthcare sector then? According to Chairwoman Ramirez, competition helps “control costs and improve quality.” This happens when providers compete, for example, “to be included in a health plan’s network, which offers a good source of patients.” “Vigorous competition for inclusion in a network” is what “enables insurers to negotiate lower reimbursement rates, which lead to insurance costs for consumers and employers,” she writes. In turn, providers “must then compete to attract patients—a need that drives them to improve the quality of their services.” Although not stated as such, too much consolidation “risks upsetting this competitive dynamic and harming consumers.”
“Similar concerns,” Chairwoman Ramirez notes, “may arise when physician groups combine or when doctors sell their practices to hospitals that already have physicians practicing the same specialties as the purchased groups.” For it is competition among physician groups that “provides patients with options and helps keep costs lower,” she writes.
In concluding, Chairwoman Ramirez notes that the FTC “supports the key aims of health care reform” and recognizes that “collaborative and innovative arrangements among providers can reduce costs, improve quality, and benefit consumers.” “But these goals,” she says, “are best achieved when there is healthy competition in provider markets fostering the sort of dynamic, high-quality, and innovative health care that practitioners seek and patients deserve.” Time will tell whether the critics are convinced of that.
*“The Beat Goes On,” by Sonny & Cher
