The Anti-Competitive Potential of Cross-Market Mergers in Health Care

27 Pages Posted: 8 May 2018 Last revised: 18 Jun 2018

Jaime S. King

University of California Hastings College of the Law

Erin C. Fuse Brown

Georgia State University College of Law

Date Written: April 23, 2018

Abstract

Health care consolidation in the United States has been widespread at all levels and across all entities. This consolidation has extended beyond horizontal mergers of hospitals or other providers to include out-of-market mergers, or cross-market mergers. Cross-market mergers include the merger or acquisition of any health care entity that does not directly compete with the acquiring entity in the same product or geographic market. Antitrust enforcers have historically had little in the way of market theory, economic models, or empirical data to inform their analyses on the potential impacts of cross-market mergers on competition. However, recent developments in economic theory and empirical studies now offer evidence that cross-market mergers can, in some instances, harm competition and drive price increases in health care markets when a common insurer exists across those markets. This article aims to start a discussion among the health policy and antitrust communities about the potential for cross-market acquisitions to harm competition, whether existing antitrust laws could theoretically support a challenge to a cross-market acquisition, and the practical challenges to doing so. This article will argue that health policy analysts, antitrust enforcers, and academics should begin to consider the anti-competitive potential of cross-market acquisitions and develop a means to analyze them both legally and economically.

Keywords: health care, antitrust, cross-market, merger, health reform, health law, health policy

Suggested Citation

King, Jaime S. and Fuse Brown, Erin C., The Anti-Competitive Potential of Cross-Market Mergers in Health Care (April 23, 2018). 11 St. L. U. J. of Health L. & Pol'y 43 (2018); Georgia State University College of Law, Legal Studies Research Paper No. 2018-12. Available at SSRN: https://ssrn.com/abstract=3055919

Jaime S. King (Contact Author)

University of California Hastings College of the Law ( email )

200 McAllister Street
San Francisco, CA 94102
United States
415-581-0415 (Phone)

Erin C. Fuse Brown

Georgia State University College of Law ( email )

P.O. Box 4037
Atlanta, GA 30302-4037
United States

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