Federal Trade Commission drops challenge to California hospital acquisition

The significance of patient outmigration patterns, third-party payor reaction, and post-merger cost savings have been regularly argued by defense counsel and hospitals as important consideration in the antitrust evaluation of hospital mergers. The reliance placed by the Commission on these factors in its Ukiah decision is a welcome confirmation that the antitrust agencies are increasingly sensitive to these aspects of hospital mergers, reflecting a more sophisticated understanding of the health care market than was suggested by the staff's more mechanical evaluative approach. Hospitals and their counsel should therefore prepare for and document these factors if they anticipate antitrust agency scrutiny of a proposed acquisition or merger.     

Federal Trade Commission v. Tenet: a retrospective review and analysis

Primarily through a series of interviews with a variety of interested persons, the author analyzes the controversial merger of two hospitals in Poplar Bluff, Missouri, in late 1999. A district court had stopped the merger in 1998; however, the Eighth Circuit overturned the decision the following year, therefore permitting the parties to execute the merger. The Article highlights the effects of, and the market's response to, the merger. Results reveal that in the two years following the merger, none of the parties interviewed believe the merger was favorable. Similarly, parties perceive that the price of care has increased, while the quality of care has not improved. Nonetheless, at the two-year mark, it remains too soon to determine whether the government's concerns in opposing the merger have been justified.     

Federal antitrust jurisdiction in peer review cases: the Pinhas decision

In Summit Health Ltd. v. Pinhas, the United States Supreme Court by a narrow majority found that the exclusion of an ophthalmologist from a hospital in Los Angeles had a sufficient effect on interstate commerce to establish federal jurisdiction under the Sherman Act. In resolving a split among the federal circuit courts of appeal, the Court applied the broad jurisdictional test from McLain v. Real Estate Board of New Orleans, Inc. to peer review proceedings. Despite many ambiguities in the majority opinion by Justice Stevens and a scathing dissent by Justice Scalia, the effect of Pinhas will be to increase the suits in federal court on antitrust grounds brought by aggrieved medical staff members and applicants denied appointments or privileges, and to decrease, if not eliminate, the likelihood of preliminary dismissal on jurisdictional grounds. This, in turn, should serve to emphasize the importance of complying with the Health Care Quality Improvement Act in order to obtain immunity from damages under federal antitrust and state laws.     

The Federal Trade Commission, clinical integration, and the organization of physician practice

This article examines Federal Trade Commission (FTC) policy--in particular, the agency's controversial 1996 statements on clinical integration--toward joint negotiations for nonrisk contracts with health plans by physicians organized into independent practice associations (IPAs) and (with hospitals) into physician-hospital organizations (PHOs). The article concludes that the policy is consistent with anti-trust principles, consistent with current thinking on the use of organized processes to improve medical care quality, specific enough to provide guidance to physicians wanting to integrate clinically, and general enough to encourage ongoing innovations in physician organization. The FTC should consider stronger sanctions for IPAs and PHOs whose clinical integration is nothing more than a sham intended to provide cover for joint negotiations, should give the benefit of the doubt to organizations whose clinical integration appears to be reasonably consonant with the statements, and should clarify several ambiguities in the statements. Health plans should facilitate IPA and PHO efforts to improve care by rewarding quality and efficiency and by providing clinically integrated organizations with claims information on individual patients. Though creating clinically integrated organizations is difficult and expensive, physicians should recognize that clinical integration can help them both to gain some negotiating leverage with health plans and to improve the quality of care for their patients.     

U.S Federal Trade Commission hosts public forum on facial recognition technology

On December 8, 2011, the United States Federal Trade Commission hosted “Face Facts, A Forum on Facial Recognition Technology,” a one-day public forum exploring emerging issues in the field of facial recognition in Washington, D.C. Consisting of thought leaders from academics, government and industry, four panels analyzed and discussed the technology behind facial recognition, current and potential uses of that technology, and the privacy and security concerns raised by this newly-emerging technology. The event was open to the public and was made available on the Internet via webcast.     

An end to a consensus on health care in the Federal Republic of Germany?

Over the past fifteen years the national government in the Federal Republic of Germany has animated the political debate about rising health care expenditures. However, it has only provided health policy leadership by shifting the burden of financing health and medical care to others. This paper presents three cases that illustrate the political and institutional constraints inherent in the German policy process that limit the proposal and implementation of appropriate policy solutions to rising health care costs. Cost controls have been inhibited because of the near-universal entitlement of national health insurance, the access all social groups have to advanced medical care, and policies targeted at providers rather than users of health services. The paper also underscores the past and future importance of regional policy coalitions in shaping national health policy.     

Private credentialing of health care personnel: an antitrust perspective. Part One

This Article explores the antitrust and other implications of private credentialing and accrediting programs in the health care industry. Although such programs are usually sponsored by powerful competitor groups, they serve the procompetitive purpose of providing useful information and authoritative advice to independent decision makers. Part One examines the risk that credentialing will sometimes be unfair to competitors and deceive consumers. Its survey of common-law, antitrust, and regulatory interventions to correct such unfairness and deception seeks to determine the degree of oversight to which credentialing and similar activities have been and should be subjected. In recommending that judicial or regulatory scrutiny should be limited to discovering whether standards and practices have a rational relation to a procompetitive purpose, the Article argues that greater intrusion into credentialing schemes would be inconsistent with market theory and first amendment values and would discourage line-drawing efforts that stimulate competition and facilitate consumer choice. By emphasizing throughout that personnel certification and institutional accreditation embody ideology and opinion as well as factual information, Part One sets the stage for the argument in Part Two that antitrust law can and should be used to contest the dominance of a single ideology of health care and to facilitate the development of alternative sources of consumer information. The Article's overall thesis is that, whereas the quality of advice given to the public about health care personnel and similar matters should not be closely regulated, neither should the supply of competing information and opinion be artificially curtailed.     

"TOO MANY LAWYERS, NOT ENOUGH PRACTICAL PEOPLE": The Policy-Making Discretion of the Federal Trade Commission

Contemporary legal theory recognizes three primary methods of controling administrative discretion: confining through substantive standards, structuring through procedural requirements, and checking through bureaucratic review. It is sometimes assumed that these techniques operate independently and that their effects are additive. This article reports on a study of Federal Trade Commission policy-making and concludes that in some instances there can be complex interactions among the legal techniques for controlling discretion, and between the legal techniques and political or bureaucratic forces shaping policy-making discretion.     

Television Food Marketing to Children Revisited: The Federal Trade Commission Has the Constitutional and Statutory Authority to Regulate

The evidence reveals that young children are targeted by food and beverage advertisers but are unable to comprehend the commercial context and persuasive intent of marketing. Although the First Amendment protects commercial speech, it does not protect deceptive and misleading speech for profit. Marketing directed at children may fall into this category of unprotected speech. Further, children do not have the same First Amendment right to receive speech as adults. For the first time since the Federal Trade Commission's original attempt to regulate marketing to children in the 1970s (termed KidVid), the political, scientific, and legal climate coalesce to make the time well-suited to reevaluate the FTC's authority for action. This paper analyzes the constitutional authority for the FTC to regulate television food marketing directed at children as deceptive in light of the most robust public health evidence on the subject.     

Federal antitrust policy and physician discontent: defining moments in the struggle for congressional relief

Organized medicine has battled the Federal Trade Commission (FTC) since the 1970s over enforcement of the antitrust laws. Physicians' discontent stems from the belief that federal policy allows managed care organizations to achieve dominance in health care markets just as it discourages physicians from taking collective action to protect their interests. This article examines two important efforts by organized medicine over a twenty-year interval to alter federal antitrust policy. In 1982, physicians and other professionals sought a special exemption from FTC jurisdiction; beginning in 1998, physicians promoted legislation that would exempt independent practitioners from the antitrust laws for collective bargaining purposes. Both initiatives passed in the House of Representatives but failed in the Senate. This article uses an advocacy coalition framework to reinterpret the events and to assess the reasons for legislative failure. The evidence suggests that in both instances, although twenty years apart, consumer groups and federal bureaucrats determined the outcome in favor of corporate medicine.     

The private sector and competition in health care markets

This paper reviews the historical trends in the regulatory and competitive approaches to containment of health care costs, covering efforts in both public and private sectors. The current interest in the potential of private-sector initiatives to stimulate competition in health care insurance and provider markets is highlighted. Since neither the workings of competition in health care nor the role and impact of the private sector in stimulating such competition are well understood, the concluding section discusses important research issues surrounding these topics.     

The changing locus of decision making in the health care sector

In the 1970s, the health policy debate focused on whether government or the medical profession should control the health care system. This article asserts that that struggle between two forms of centralized control was both less promising and less consequential than the devolution of decision-making authority upon consumers and their agents that is occurring today and that seems likely to continue as competitive forces become stronger and opportunities for meaningful consumer choice increases. What we are witnessing is the simultaneous deprofessionalization and depoliticization of important decisions affecting health care, a decentralization and diversification of the system that is opening new possibilities for translating diverse consumer desires into provider performance. Although covering much familiar ground, this article links a variety of seemingly discrete issues under the sterility of the competition-versus-regulation debate and to show the historical and ethical significance of the major changes that are under way in the health care sector today.