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Brief of Amici Curiae Economics Professors in Federal Trade Commission v. Phoebe Putney Health System (U.S. Supreme Court)

Health Management, Policy and Innovation, Vol. 1 (2012)

28 Pages Posted: 19 Oct 2012  

Bernard S. Black

Northwestern University - Pritzker School of Law; Northwestern University - Kellogg School of Management; European Corporate Governance Institute (ECGI)

David Dranove

Northwestern University - Kellogg School of Management

Cory S. Capps

Bates White, LLC

Martin Gaynor

Carnegie Mellon University; National Bureau of Economic Research (NBER); Leverhulme Centre for Market and Public Organisation

Robert J. Town

University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

Timothy Bresnahan

Stanford University - Department of Economics; Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

David M. Cutler

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Guy David

University of Pennsylvania - Health Care Systems Department

Alain C. Enthoven

Stanford University - Knight Management Center

Gautam Gowrisankaran

University of Arizona - Eller College of Management; National Bureau of Economic Research (NBER)

Deborah Haas-Wilson

Smith College

Katherine Ho

Columbia University - Department of Economics; National Bureau of Economic Research (NBER)

Richard Lindrooth

University of Colorado Anschutz Medical Campus

Anthony T. Lo Sasso

University of Illinois at Chicago - School of Public Health

Thomas G. McGuire

Harvard Medical School - Department of Health Care Policy

Aviv Nevo

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

Stephen L. Parente

University of Illinois at Urbana-Champaign - Department of Economics

Mark V. Pauly

University of Pennsylvania - Health Care Systems Department; National Bureau of Economic Research (NBER)

Tomas Philipson

University of Chicago; National Bureau of Economic Research (NBER)

Uwe Reinhardt

affiliation not provided to SSRN

Mark Satterthwaite

Northwestern University - Kellogg School of Management

R. Lawrence Van Horn

Vanderbilt University - Strategy and Business Economics

William White

Cornell University

Dennis Yao

Harvard Business School; University of Pennsylvania - Business & Public Policy Department

Jack Zwanziger

University of Illinois at Chicago

Date Written: August 20, 2012

Abstract

This amicus brief was filed in Federal Trade Commission v. Phoebe Putney Health System, Inc., in which the FTC has obtained review of an 11th Circuit decision that insulated a merger of two nonprofit hospitals from antitrust scrutiny. We make two arguments in the amicus brief. First, there is no compelling theoretical basis for an antitrust exemption for nonprofit hospitals. That is, economic theory provides no determinate conclusions regarding whether nonprofits will exploit market power if given the opportunity. As a consequence, whether there is an economic basis for more favorable treatment of nonprofit hospitals is an empirical matter. Second, there is a strong consensus in empirical research that, in general, nonprofit hospitals do exploit their market power by raising prices. This empirical evidence on the exercise of market power by nonprofit hospitals strongly suggests that they should not be exempt from antitrust scrutiny. Such an exemption would serve the private interests of nonprofit hospitals to the detriment of consumers and society as a whole.

Suggested Citation

Black, Bernard S. and Dranove, David and Capps, Cory S. and Gaynor, Martin and Town, Robert J. and Bresnahan, Timothy and Cutler, David M. and David, Guy and Enthoven, Alain C. and Gowrisankaran, Gautam and Haas-Wilson, Deborah and Ho, Katherine and Lindrooth, Richard and Lo Sasso, Anthony T. and McGuire, Thomas G. and Nevo, Aviv and Parente, Stephen L. and Pauly, Mark V. and Philipson, Tomas and Reinhardt, Uwe and Satterthwaite, Mark and Van Horn, R. Lawrence and White, William and Yao, Dennis and Zwanziger, Jack, Brief of Amici Curiae Economics Professors in Federal Trade Commission v. Phoebe Putney Health System (U.S. Supreme Court) (August 20, 2012). Health Management, Policy and Innovation, Vol. 1 (2012). Available at SSRN: https://ssrn.com/abstract=2153979

Bernard S. Black (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States
312-503-2784 (Phone)

Northwestern University - Kellogg School of Management

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-5049 (Phone)

European Corporate Governance Institute (ECGI)

Brussels
Belgium

David Dranove

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States
847-491-8682 (Phone)
847-467-1777 (Fax)

Cory S. Capps

Bates White, LLC ( email )

2001 K St., NW
Suite 700
Washington, DC 20006
United States
202.216.1151 (Phone)
202.408.7838 (Fax)

Martin Gaynor

Carnegie Mellon University ( email )

H. John Heinz III School of Public Policy
and Management
Pittsburgh, PA 15213-3890
United States
412-268-7933 (Phone)
412-268-5338 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Leverhulme Centre for Market and Public Organisation

12 Priory Road
Bristol BS8 1TN
United Kingdom

Robert J. Town

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Timothy F. Bresnahan

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
650-725-5702 (Fax)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David M. Cutler

Harvard University - Department of Economics ( email )

Littauer Center, Room 315A
Cambridge, MA 02138
United States
617-496-5216 (Phone)
617-495-8570 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-868-3900 (Phone)
617-868-2742 (Fax)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Guy David

University of Pennsylvania - Health Care Systems Department ( email )

3641 Locust Walk
Colonial Penn Center
Philadelphia, PA 19104-6358
United States

HOME PAGE: http://www.wharton.upenn.edu/faculty/david.html

Alain C. Enthoven

Stanford University - Knight Management Center ( email )

655 Knight Way
Stanford, CA 94305-7298
United States

Gautam Gowrisankaran

University of Arizona - Eller College of Management ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States

HOME PAGE: http://econ.arizona.edu/faculty/gowrisankaran.asp

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Deborah Haas-Wilson

Smith College ( email )

Department of Economics
Northampton, MA 01060
United States
413-585-3636 (Phone)
413-585-3635 (Fax)

Katherine Ho

Columbia University - Department of Economics ( email )

420 West 118th Street
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Richard Lindrooth

University of Colorado Anschutz Medical Campus ( email )

1, L15-1503 12631 E. 17th Avenue
Aurora, CO 80045
United States

Anthony T. Lo Sasso

University of Illinois at Chicago - School of Public Health ( email )

1603 West Taylor Street
Chicago, IL 60612
United States

Thomas G. McGuire

Harvard Medical School - Department of Health Care Policy ( email )

180 Longwood Ave
Boston, MA 02115
United States

Aviv Nevo

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Stephen L. Parente

University of Illinois at Urbana-Champaign - Department of Economics ( email )

410 David Kinley Hall
1407 W. Gregory
Urbana, IL 61801
United States

Mark V. Pauly

University of Pennsylvania - Health Care Systems Department ( email )

3641 Locust Walk
208 Colonial Penn Center
Philadelphia, PA 19104-6358
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Tomas J. Philipson

University of Chicago ( email )

Graduate School of Business
1101 East 58th Street
Chicago, 60637

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Uwe Reinhardt

affiliation not provided to SSRN ( email )

Mark A. Satterthwaite

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

R. Lawrence Van Horn

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States

William White

Cornell University ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States

Dennis Yao

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

University of Pennsylvania - Business & Public Policy Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6372
United States
215-898-3019 (Phone)

Jack Zwanziger

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

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