Anti-trust laws solve – a single-buyer isn’t possible

Before I discuss the Statements of Enforcement Policy, some staff advisory opinions relating to the Statements, and proposed antitrust exemptions and loosening of antitrust standards under the proposed Medicare legislation, let me describe briefly some basic antitrust principles as they apply to health care. Antitrust law is based on the premise that competition generally benefits consumers by producing the best mix of quality, goods and services at the lowest prices. In assessing possible restraints on competition, the Commission examines the market from the point of view of the consumer. The Commission seeks to determine whether the actions in question will promote or hinder consumers' interest in being able to choose among a variety of quality and price options according to their own needs.

The FTC enforces the antitrust laws to ensure that competitive forces will be allowed to stimulate the development of health care delivery systems desired by consumers. Through sound antitrust enforcement, the FTC has eliminated anticompetitive restraints and thus has helped market forces create an environment in which innovative forms of health care delivery could emerge to compete on their merits.

Hospitals and physicians may act together to provide guidance for patients, innovative services and health care delivery plans, credentialling of physicians, advocacy of positions before Governmental bodies, and improvement of quality of health care services. The antitrust laws allow physicians who sufficiently integrate their practices by sharing financial risk to act jointly, in general, unless such activity monopolizes or is an attempted monopolization of a market.

When physicians do not integrate and share substantial financial risk, concerted activities such as price-fixing, allocating customers or markets, and other restraints on competition are per se illegal or condemned if no plausible efficiency justification exists under the antitrust laws. This means that no further analysis of the market is necessary because such activities almost always have the effect of raising prices or decreasing quality or service to the detriment of consumers.