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Helen Kim, Dionne Lomax, Sep 30, 2014
The consolidation of health care markets and the impact of this consolidation on prices, costs, and quality, has been a hotly debated topic in the health care industry. Hospitals across the country are merging and acquiring physician practices faster than they have in decades. These dynamic changes in the nation’s health care delivery systems have been prompted, in part, by the implementation of the Patient Protection and Affordable Care Act, which seeks, among other things, to promote higher quality, lower cost health care by encouraging increased coordination of care among health care providers through the creation of Accountable Care Organizations.
One premise of the ACA is that the restructuring of the health care industry through coordinated care and integration should enable providers to cut costs and improve quality in ways that benefit patients. However, antitrust enforcement officials are quick to remind providers that the ACA does not change the fact that provider collaborations remain subject to the antitrust laws. Thus, providers must ensure that their new health care delivery systems do not enhance or create market power or otherwise harm consumers.
Efficiencies are frequently a significant part of the business rationale for hospital mergers and other provider collaborations and are an area of increased focus in health care antitrust litigation. However, receiving credit for the efficiency-enhancing aspects of a combination in a merger review is often difficult…This is particularly evident when analyzing the FTC’s treatment of quality improvement claims in some of its most recent cases.
