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Abstract:
A central challenge for all health care reform proposals currently being discussed is finding the means to effectively channel market forces given many deeply embedded features of our system and the peculiar economics of health care delivery and financing. This essay traces the path of competition law in health care and explains its chicken-and-egg relationship with provider organizational arrangements. It explores a central puzzle for future health care policy: why have market forces failed to counteract organizational fragmentation? Answering this question requires an understanding of why competition policy is inexorably linked to the organizational structures of health care providers and payers and how that the fragmentation that bedevils those arrangements has undermined its success. The article concludes with a negative assessment of recent “consumer directed” approaches, finding them likely to increase fragmentation and incapable of delivering the benefits of competition.

Health reform, antitrust, hospital mergers, FTC, managed care, health economics, consumer directed health care, fragmentation, HMO, market failure

Abstract:
One is hard-pressed to find in law an undertaking more fraught with uncertainty than the application of the efficiencies defense in merger analysis. Generalist fact finders (judges) and politically-attuned government officials (prosecutors and regulators) are charged with two Herculean tasks: (1) predicting the outcome of organic changes in business enterprises and (2) comparing the magnitude of those changes to the equally uncertain amount of harm to future competition that the transaction will cause. Given the enormous, perhaps intractable, uncertainty of this inquiry, it is therefore paradoxical that many of the strongest advocates for strengthening the role of efficiencies analysis in merger reviews are self-described proponents of bringing a ‘new empiricism’ to antitrust analysis. This chapter focuses on the tensions inherent in incorporating an efficiencies defense (or evaluating efficiencies as part of the appraisal of mergers) and maintaining the rigour and impartiality promised by proponents of the ‘empirical’ approach. This argument should not be misconstrued as a brief for abandoning the efficiencies inquiry altogether. Rather, it is, first, an appeal for candour (and humility) by those undertaking the inquiry; and second, it is a brief for constraining discretion by imposing more clearly delineated presumptive rules of law on judges and insisting on greater transparency by agencies in deciding whether to challenge mergers.

Antitrust, mergers, efficiencies defense, empiricism, merger guidelines, FTC, Clayton Act

Abstract:
Over the last thirty years the Federal Trade Commission and the Department of Justice have challenged dozens of physician cartels, networks, and other arrangements that they alleged constituted price fixing or other restraints of trade under the antitrust laws. In addition, the antitrust agencies have issued numerous advisory opinions, published detailed statements of enforcement policy, and made dozens of public statements on the issue of physician collaboration. The puzzle explored in this essay is why the government's deployment of unparalleled enforcement resources has not curtailed physician attempts to engage in collective bargaining and other attempts to restrain price competition. It first analyzes the hypothesis that overly cautious government enforcement policies created a mismatch between penalties and rewards that invited abuse. While finding merit in this explanation, the essay offers a more nuanced account. It suggests that a convergence of other factors including doctrinal shortcomings, political pressures, and institutional factors may have deterred the Agencies from seeking stronger remedies and emboldened parties who questioned the role of competition in health markets generally. A related claim of this essay is that the Agencies may have inadvertently precipitated some of this conduct by the regulatory efforts they have undertaken.

antitrust, physicians, FTC, U.S. Department of Justice, Health Care Competition, Managed Care

Abstract:
The law governing charitable corporations remains neglected and thoroughly muddled. Still unsettled are central issues regarding the accountability of directors and management, legal standards governing organic changes by nonprofit institutions, and mechanisms to ensure

fidelity to the organization's charitable mission. For nonprofit corporations in the health care sector, which represent a large proportion of all health services supplied nationwide, particularly charity care, these shortcomings have had serious repercussions. The central issue addressed in this Article is how fidelity to the mission of the charitable health care corporation should be monitored. It advances the normative perspective that the law should maximize opportunities for nonprofits to fulfill their charitable missions, but should insist on more than nebulous assurances that society will receive tangible benefits. For nonprofit corporate doctrine, this Article proposes that nonprofit corporate law incorporate a principle of "mission primacy" - a doctrinal recognition that the nonprofit corporation's articulated charitable mission is its central objective.

antitrust, hospitals, hospital mergers, nonprofit organization, Clayton Act

Abstract:
This article considers quality-based justifications for antitrust challenges to collaboration among health care professionals. It first examines doctrinal developments resisting such justifications and, with a skeptical eye, analyzes attempts to interject quality of care and worthy motive defenses into antitrust appraisals of horizontal restraints of trade. Next the article assesses the economic basis and the risks and benefits of a market failure defense that would allow some quality-enhancing restraints of trade to escape antitrust challenge. Its principle recommendation is that courts recognize a narrow, market failure defense subject to several limiting principles to cabin its reach. The article concludes by applying its suggested approach to the market failure defense in cases involving horizontal conspiracies in which defendants justified certain actions by invoking their salutary effects on quality of care.

antitrust, Sherman Act, collusion, market failure, health care, physicians, market failure defense, quality of care

Abstract:
Following a string of government losses in cases challenging hospital mergers in federal court, the Federal Trade Commission and the Department of Justice issued their report on competition in health care seeking to set the record straight on a number of issues that underlie the judiciary's resolution of these cases. One such issue is the import of nonprofit status for applying antitrust law. This essay describes antitrust's role in addressing the consolidation in the hospital sector and the subtle influence that the social function of the nonprofit hospital has had in merger litigation. Noting that the political and social context in which these institutions operate is never far from the surface, it takes issue with the proposal to cabin merger doctrine so as to deny the significance of nonprofit status in merger analysis. Given the dynamic change in the regulatory climate and heterogeneity of local health care markets, it advises courts not to accept the FTC's preemptive standard regarding the significance of hospitals' nonprofit status and keep open the possibility of fashioning new presumptive rules tailored to more complete economic accounts of nonprofit firm behavior.

Hospitals, nonprofit organizations, mergers, antitrust, Clayton Act, hospital mergers, health care

Abstract:
A central question confronting proponents of managed competition during the health reform debate in 1994 was whether competitive networks or integrated delivery systems would emerge. Under reformers’ vision, controlling costs depended on the emergence of a sufficient number of efficient and viable integrated delivery systems. Conversely, if one or a few integrated networks dominate the market for physician or hospital services, rivalry on the main issues of health care cost control would likely dissipate. This article argues that vigilant and sensible antitrust enforcement was also a prerequisite for the success of the managed competition model. Despite the considerable emphasis on economic analysis in antitrust commentary and litigation, neither commentators nor judges have carefully explored the implications of market failure for antitrust doctrine in health care cases. Market imperfections add significantly to the competitive risks posed by restraints of trade and other conduct policed by antitrust law. Moreover, these conditions diminish the likelihood that self-correcting market forces will ameliorate whatever dangers antitrust law misses. Economic evidence suggesting that a large part of the country can support only the bare minimum of efficiently-sized integrated systems adds to the challenge facing market based reform.

health care reform, antitrust, integrated delivery systems, HMOs, FTC, vertical integration, PHOs, PPOs, physicians, hospital competition, physician cartels, provider networks, exclusion

Abstract:
This article, written at the dawn of the era of "competitive reform" in health care examines the case and prospects for the introduction of competition in health care delivery and financing. It observes the failures of the ancienne regime of fee for service payment and professional sovereignty and discusses the benefits of market-oriented policy. Its contribution, still salient today, is the lesson that competition cannot succeed without regulation. It identifies legislative, professional, and cultural hurdles to effective implementation of competitive norms and policies that have impeded the success of competition policy in health care.

antirust, health law, managed care, fee for service, hospital mergers, health care reform, FTC, physicians, competition policy, market failure

Abstract:
The libertarian prescription for health care reform is a admixture of deregulation and purportedly utilitarian calculation of social benefits and costs. In Mortal Peril: Our Inalienable Right to Health Care?, Richard Epstein's offers a stark roadmap that embraces an unfettered free market for health care services, indigent care left primarily to the charitable impulses of providers and no cross subsidies between classes, generations or other categories of citizens (including the sick and healthy). This review essay argues that the history, economics, and politics of health markets belie Epstein's abstract reasoning. Though much of the argument in Mortal Peril is written in the language of economics and cost-benefit analysis, Epstein's core faith is libertarianism. The essay contends that Epstein eschews careful analysis of the economic complexities of health care markets in favor of simple principles that focus almost entirely on autonomy. It should be understood, especially by policymakers, that the resulting harsh policy prescriptions are not compelled by economic reasoning but by a set of arbitrarily chosen first principles.

Health care, health care reform, managed care, libertarianism, cross-subsidies, EMTALA, charity care, health economics

Abstract:
Abstract: Analysis of the competitive effects of hospital mergers requires antitrust tribunals to make exceedingly fine-tuned appraisals of complex economic relationships. The law requires fact finding in a number of complex areas, e.g., defining product and geographic markets, predicting the possibility of that firms will engage in coordinated behavior; and assessing efficiencies flowing from the merger. Further complicating the process is the fact that these decisions require judgments regarding what the future may hold in an industry undergoing revolutionary change. Like pilots landing at night aboard an aircraft carrier, courts are aiming for a target that is small, shifting and poorly illuminated.

health care, hospitals, hospital mergers, antitrust, market definition, Clayton Act, FTC

Abstract:
The need to evaluate the competitive consequences of cooperation among rivals has long posed a dilemma for antitrust enforcement. Collaboration can reduce rivalry, raise prices and otherwise reduce consumer welfare; at the same time cooperation among rivals carries the promise of creating cost savings, correcting market failures and producing other benefits. In many cases antitrust doctrine requires a balancing of the positive and negative effects of coordination. In health care, federal antitrust enforcement agencies have increasingly turned to regulatory tools including policy statements, advisory opinions, speeches and regulatory decrees settling cases to strike this balance. However, the agencies have paid insufficient attention to the complexities inherent in making these tradeoffs and would be well advised to adopt structured inquiries into efficiencies defenses and related issues.

antitrust, efficiencies, market failure, collusion, managed care

Abstract:
Antitrust enforcement in health care has undergone considerable buffeting in recent years with government agencies losing a string of important cases in federal court and support for vigorous enforcement waning among some policymakers. Critics of doctrinal development in antitrust law have begun to question whether the underlying economic relationships are accurately reflected in the law of antitrust as applied in health care. This article advances the positive claim that antitrust doctrine often suppresses pertinent features of the health care marketplace and urges courts and enforcers to pause before applying precedent and evidentiary rules of thumb that do not fit the economic realities of contemporary health markets. It faults many, but certainly not all, analyses of trade restraints and consolidations for slavishly following the Chicago School template when a more economically-sound analysis requires appreciation of market imperfections in health care. While these errors do not always tilt in favor of leniency for antitrust defendants, they often tend to favor the status quo in markets that most economists agree are suboptimal. Like Procrustes, the mythical figure who lopped off guests' feet or stretched their legs so they would fit his bed, Chicago analysis may at times inappropriately adjust real world circumstances to accommodate its theory.

Antitrust, health care, economics

Abstract:
Although instrumental in ushering in competition to the health care industry and later in safeguarding the competitive structure of markets, antitrust law has come under attack. A series of questionable judicial decisions has clouded the standards applicable to analyzing health care markets. Legislative efforts to immunize conduct from antitrust challenge also have gathered support in recent years. This study finds scant economic or policy basis for these developments and concludes that anti-managed sentiments have diluted enthusiasm for applying competitive principles in health care. This phenomenon has resulted in outcome-driven judicial decisions and legislative activity geared to serving political expediency rather than sound policy tenets. The paper recommends heightened antitrust scrutiny of provider and insurer markets by federal and state enforcers and increased empirical research into the workings of imperfect health care markets and the effects of past antitrust decisions.

Abstract:
This article provides a critical appraisal of the summer's three major health care antitrust events. The California Dental Association case, the Justice Department's challenge to the Aetna-Prudential merger, and the proposed Quality Health Care Coalition Act of 1999 are likely to have a significant influence on the trajectory of antitrust enforcement in the coming years. The author argues that the reasoning of these precedents suffers from an over reaction to the managed care bogeyman and a lack of attention to sound antitrust jurisprudence. In a postscript, it finds similar shortcomings with the Eighth Circuit's recent decision in FTC & State of Missouri v. Tenet Healthcare. The increasing unwillingness of courts and policymakers to assume that health care markets should be left to function without strong deference to the judgment of health professionals marks a new and unwarranted turn in antitrust health care doctrine that the author criticizes.