Why competition law matters to health care quality

Health Affairs

Volumn 22, Issue 2, 2003, Pages 31-44

  Sage, William M ^a   Hyman, David A ^b   Greenberg, Warren ^c  

^a Och Spine at New York Presbyterian Hospitals   (United States)

^b UNIVERSITY OF MARYLAND SCHOOL OF LAW   (United States)

^c GEORGE WASHINGTON UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CONSUMER; ECONOMIC ASPECT; ECONOMICS; GOVERNMENT; HEALTH CARE POLICY; HEALTH CARE QUALITY; LAW; LEGAL ASPECT; MOTIVATION; UNITED STATES;

ANTITRUST LAWS; CONSUMER SATISFACTION; ECONOMIC COMPETITION; HEALTH POLICY; MOTIVATION; QUALITY ASSURANCE, HEALTH CARE; UNITED STATES; UNITED STATES GOVERNMENT AGENCIES;

EID: 0037365129     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.22.2.31     Document Type: Review

References (46)

1. Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975).
2. L.T. Kohn, J.M. Corrigan, and M.S. Donaldson, eds., To Err Is Human: Building a Safer Health System (Washington: National Academy Press, 1999).
3. Institute of Medicine, Crossing the Quality Chasm: A New Health System for the Twenty-first Century (Washington: National Academy Press, 2001).
4. 15 U.S. Code, Sec. 1 (1994).
5. Ibid, Sec. 2.
6. Ibid., Sec. 18.
7. Ibid., Sec. 45.
8. Ibid., Sec. 1012(b).
9. 42 U.S. Code Sees. 11,101-11,152 (2002).
10. California Retail Liquor Dealers Ass'n v. Midcal Aluminum Co., 445 U.S. 97 (1980).
11. F.J. Hellinger, "An Analysis of Physician Antitrust Exemption Legislation," Journal of the American Medical Association 286, no. 1 (2001): 83-88.
12. T.L. Greaney, "Quality of Care and Market Failure Defenses in Antitrust Health Care Litigation," Connecticut Law Review 21, no. 3 (1989): 605-665.
13. C.C. Havighurst, "Health Care as a (Big) Business: The Antitrust Response," Journal of Health Politics, Policy and Law 26, no. 5 (2001): 939-955.
14. W.M. Sage and P.J. Hammer, "A Copernican View of Health Care Antitrust," Law and Comtemporary Problems 65, no. 4 (2002): 241-290;
15. and W.M. Sage and P.J. Hammer, "Competing on Quality of Care: The Need to Develop a Competition Policy for Health Care Markets," University of Michigan Journal of Law Reform 32, no. 4 (1999): 1069-1118.
16. J.F. Blumstein, "Health Care Reform and Competing Visions of Medical Care: Antitrust and State Provider Cooperation Legislation," Cornell Law Review 79, no. 6 (1994): 1459-1506, 1482.
17. P. Starr, The Social Transformation of American Medicine (New York Basic Books, 1982), 198-232.
18. Am. Med. Ass'n v. United States, 317 U.S. 519 (1943).
19. Wilk v. Am Med. Ass'n, 895 F.2d 352 (7th Cir. 1990).
20. FTC v. Indiana Fed'n of Dentists, 476 U.S. 447, 459 (1986).
21. National Soc'y of Prof'l Eng'rs v. United States, 435 U.S. 679, 695 (1978).
22. W.L. Kissick, Medicine's Dilemmas: Infinite Needs versus Finite Resources (New Haven, Conn.: Yale University Press, 1994).
23. Health Care Services and Products Division, "FTC Antitrust Actions in Health Care Services and Products," www.ftc.gov/bc/hcupdate020118.pdf (15 November 2002).
24. P.J. Hammer and W.M. Sage, "Antitrust, Health Care Quality, and the Courts," Columbia Law Review 102, no. 3 (2002): 545-649.
25. P.J. Hammer, "How Doctors Became Distributors: A Fabled Story of Vertical Relations," Loyola Consumer Law Reporter 14, no. 4 (2002): 411-438.
26. N.W. Averitt and R.H. Lande, "Consumer Choice: The Practical Reason for Antitrust and Consumer Protection Law," Loyola Consumer Law Reporter 10, no. 1 (1998): 44-63.
27. Health Care Services and Products Division, "FTC Antitrust Actions."
28. See, for example, Boczar v. Manatee Hosps. and Health Sys., Inc., 993 F.2d 1514, 1517, 1519 (11th Cir. 1993) (reinstating jury verdict for plaintiff obstetrician based on evidence that she provided different style of medicine, consisting of lower-cost services and fewer cesarean sections).
29. From 1985 to 1999 the only antitrust opinion to assess clinical outcomes was a staff-privileges case, Angelico v. Lehigh Valley Hosp., Inc. 984 F. Supp. 308, 313-314 (E.D. Pa. 1997), rev'd by 184 F.3d 268 (3d Cir. 1999). The court credited testimony by the plaintiff's expert with respect to physician-specific data on mortality, but even so did not address its competitive implications.
30. American Medical Ass'n, 94 F.T.C. 701 (1979), aff'd as modified, 638 F.2d 443 (2d Cir. 1980), aff'd by an equally divided court, 455 U.S. 676 (1982).
31. The footnote reads: "More generally, the fact that a restraint operates upon a profession as distinguished from a business is, of course, relevant in determining whether that particular restraint violates the Sherman Act. It would be unrealistic to view the practice of professions as interchangeable with other business activities, and automatically to apply to the professions antitrust concepts which originated in other areas. The public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently." Goldfarb, 421 U.S. at 788-789, n. 17.
32. This interpretation of California Dental is undercut by the refusal of the 9th Circuit Court of Appeals, to which the case was remanded by the Supreme Court for further proceedings, to allow additional fact finding on the effects of the restrictions in question. "FTC Dismisses Case against California Dental Association," Press Release, 5 February 2001, www.ftc.gov/opa/2001/ 02/cdadismisspr.htm (15 November 2002).
33. Hammer and Sage, "Quality and the Courts," 557.
34. Similarly, as a former assistant attorney general for antitrust noted, from a competition law perspective, "there is in most cases a fundamental contradiction in the argument that quality can be enhanced through restraints among producers (providers) that significantly restrain the competitive process and result in adverse price and output effects." T.E. Kauper, "The Role of Quality of Health Care Considerations in Antitrust Analysis," Law and Contemporary Problems 51, no. 2 (1988): 273-340. From a provider perspective, by contrast, it is inconceivable that quality can be improved without self-regulation and self-imposed restraints.
35. T.J. Muris, "Everything Old Is New Again: Health Care and Competition in the Twenty-first Century," www.ftc.gov/speeches/muris/ murishealthcarespeech0211.pdf (15 November 2002).
36. Health Care Services and Products Division, "FTC Antitrust Actions."
37. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984).
38. Staff Advisory Opinion Re MedSouth, Inc. reflected in letter from Jeffrey W. Brennan, assistant director, Bureau of Competition, to John J. Miles, Ober, Kaler, Grimes, and Shriver, 19 February 2002, www.ftc.gov/bc/adops/medsouth.htm (15 November 2002).
39. D.A. Hyman and C. Silver, "You Get What You Pay For: Result-Based Compensation for Health Care," Washington and Lee Law Review 58, no. 4 (2001): 1427-1490.
40. Staff Advisory Opinion Re MedSouth, Inc.
41. Centers for Medicare and Medicaid Services, "U.S. Healthcare System: The Nation's Health Dollar CY 2000," www.cms.gov/charts/series (15 November 2002).
42. Muris, "Everything Old Is New Again."
43. 946 F. Supp. 1285 (W.D. Mich. 1996), aff'd without opinion, 121 F.3d 708 (6th Cir.), reported in full, 1997-2 Trade Cas. (CCH) P 71,863 (6th Cir. 1997).
44. Remarkably enough, in several of these cases, courts suggested that competition increases price and decreases quality, rather than the converse.
45. Muris, "Everything Old Is New Again."
46. Indiana Federation, 476 U.S. at 462.