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Antitrust Guidelines in Health Care Markets

Antitrust Guidelines in Health Care Markets To the Editor: The Viewpoint on accountable care organizations (ACOs) and antitrust1 suggested that while the focus on the antitrust issues related to ACOs may have diminished with the release of the final rules from the Centers for Medicare & Medicaid Services, the significance of the issues will only continue to grow as the Medicare Shared Savings Program moves toward full-scale implementation. The article, however, made a subtle but important mistake in characterizing the guidelines from the Department of Justice and the Federal Trade Commission2 published as a companion to the Medicare Shared Savings Program. The authors twice identify a “balance” between market power and integration efficiencies as the goal of the antitrust guidelines. The concept of balance misstates the vital role of competition policy and antitrust enforcement in the program. The Federal Trade Commission and Antitrust Division of the Department of Justice are law enforcement agencies. Aggregating market power by contract with competitors, whether through the mechanism of ACOs or otherwise, is illegal under the Sherman Act. The ACO guidelines are an attempt to explain how the antitrust laws apply in this particular context, and the guidelines make plain that the underlying substantive standards remain unchanged by the Medicare Shared Savings Program and the Affordable Care Act generally. The purpose of the guidelines, therefore, is not to create a “balance” but instead to recognize that the antitrust laws have always and will continue to welcome integrative efficiencies. Likewise, the antitrust laws have always and will continue to condemn transactions that result in anticompetitive effects. Employers and other health care consumers should continue to encourage federal antitrust enforcement in health care markets. The projected financial savings from the ACO program are quite modest—the final rules predict a 4-year median net savings of $470 million3—but the potential harm to consumers from antitrust violations is enormous. Better coordinated care delivery models are needed, and if done right, the potential for anticompetitive price increases is small and carries a correspondingly small risk of antitrust condemnation. If done wrong, however, health care consumers may be faced with even higher health care costs. The Medicare Shared Savings Program should not be an excuse for anticompetitive consolidation in the health care sector. Back to top Article Information Conflict of Interest Disclosures: The author has completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest and none were reported. References 1. Scheffler RM, Shortell SM, Wilensky GR. Accountable care organizations and antitrust: restructuring the health care market. JAMA. 2012;307(14):1493-149422496262PubMedGoogle ScholarCrossref 2. Federal Trade Commission; Department of Justice. Statement of antitrust enforcement policy regarding accountable care organizations participating in the Medicare shared savings program. Fed Regist. 2011;76(209):67026-67032Google Scholar 3. Centers for Medicare & Medicaid Services (CMS); HHS. Medicare program; Medicare shared savings program: accountable care organizations: final rule. Fed Regist. 2011;76(212):67802-6799022046633PubMedGoogle Scholar http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png JAMA American Medical Association

Antitrust Guidelines in Health Care Markets

JAMA , Volume 308 (4) – Jul 25, 2012

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Publisher
American Medical Association
Copyright
Copyright © 2012 American Medical Association. All Rights Reserved.
ISSN
0098-7484
eISSN
1538-3598
DOI
10.1001/jama.2012.8157
Publisher site
See Article on Publisher Site

Abstract

To the Editor: The Viewpoint on accountable care organizations (ACOs) and antitrust1 suggested that while the focus on the antitrust issues related to ACOs may have diminished with the release of the final rules from the Centers for Medicare & Medicaid Services, the significance of the issues will only continue to grow as the Medicare Shared Savings Program moves toward full-scale implementation. The article, however, made a subtle but important mistake in characterizing the guidelines from the Department of Justice and the Federal Trade Commission2 published as a companion to the Medicare Shared Savings Program. The authors twice identify a “balance” between market power and integration efficiencies as the goal of the antitrust guidelines. The concept of balance misstates the vital role of competition policy and antitrust enforcement in the program. The Federal Trade Commission and Antitrust Division of the Department of Justice are law enforcement agencies. Aggregating market power by contract with competitors, whether through the mechanism of ACOs or otherwise, is illegal under the Sherman Act. The ACO guidelines are an attempt to explain how the antitrust laws apply in this particular context, and the guidelines make plain that the underlying substantive standards remain unchanged by the Medicare Shared Savings Program and the Affordable Care Act generally. The purpose of the guidelines, therefore, is not to create a “balance” but instead to recognize that the antitrust laws have always and will continue to welcome integrative efficiencies. Likewise, the antitrust laws have always and will continue to condemn transactions that result in anticompetitive effects. Employers and other health care consumers should continue to encourage federal antitrust enforcement in health care markets. The projected financial savings from the ACO program are quite modest—the final rules predict a 4-year median net savings of $470 million3—but the potential harm to consumers from antitrust violations is enormous. Better coordinated care delivery models are needed, and if done right, the potential for anticompetitive price increases is small and carries a correspondingly small risk of antitrust condemnation. If done wrong, however, health care consumers may be faced with even higher health care costs. The Medicare Shared Savings Program should not be an excuse for anticompetitive consolidation in the health care sector. Back to top Article Information Conflict of Interest Disclosures: The author has completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest and none were reported. References 1. Scheffler RM, Shortell SM, Wilensky GR. Accountable care organizations and antitrust: restructuring the health care market. JAMA. 2012;307(14):1493-149422496262PubMedGoogle ScholarCrossref 2. Federal Trade Commission; Department of Justice. Statement of antitrust enforcement policy regarding accountable care organizations participating in the Medicare shared savings program. Fed Regist. 2011;76(209):67026-67032Google Scholar 3. Centers for Medicare & Medicaid Services (CMS); HHS. Medicare program; Medicare shared savings program: accountable care organizations: final rule. Fed Regist. 2011;76(212):67802-6799022046633PubMedGoogle Scholar

Journal

JAMAAmerican Medical Association

Published: Jul 25, 2012

References