[Congressional Record Volume 143, Number 147 (Tuesday, October 28, 1997)]
[Extensions of Remarks]
[Page E2104]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                     WHAT HEALTH ANTI-TRUST POLICY?

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, October 28, 1997

  Mr. STARK. Mr. Speaker, following is an editorial from the October 
13, 1997, ``Modern Healthcare.'' I wish I'd said it first.

     As Government Caves, Providers Make Their Own Antitrust Policy

       When the government sets antitrust policy for a particular 
     industry, you would hope the policy is being driven by the 
     concerns of buyers who are wary of the potentially anti-
     competitive market clout of sellers.
       Not so in healthcare.
       As evidenced by numerous events over the past several 
     years, it's clear federal antitrust policy as it pertains to 
     healthcare providers is guided by providers themselves and 
     their well-paid lawyers and economists.
       In other words, the sellers are setting their own rules of 
     competition with the full acquiescence of federal lawmakers. 
     The providers' sole justification? Trust us, we know what 
     we're doing. We know what's best for patients.
       In fact, the provider industry is so brazen and so 
     confident it expects special treatment under the federal 
     antitrust laws.
       For a definition of brazen, read Mary Chris Jaklevic's 
     coverage of the deal between the two largest hospitals in 
     Grand Rapids, Mich., which merged despite not having final 
     clearance from the Federal Trade Commission, or Charlotte 
     Snow's story on how the only two acute-care hospitals in 
     Greensboro, N.C., outwitted the FTC and the North Carolina 
     attorney general's office to obtain their monopoly (Oct. 6, 
     pages 2 and 14, respectively). The hospitals in both cases 
     have promised to limit price increases and pass along 
     millions of dollars in economic efficiencies to consumers.
       Why shouldn't providers act with such bravado? The 
     government has caved in to virtually all their demands:
       In 1993 the FTC and the U.S. Justice Department release the 
     first-ever antitrust enforcement guidelines for providers 
     that created six ``safety zones,'' or categories of business 
     transactions that won't be subject to federal antitrust 
     scrutiny.
       In 1994 the two agencies revised the guidelines and added 
     two more safety zones.
       In 1996 the agencies released more lenient antitrust 
     standards for reviewing physician networks.
       Federal judges have thrown out the agencies' last three 
     antitrust lawsuits against merging hospitals.
       In a time when hundreds of deals are being put together, 
     the government has only one pending case against merging 
     hospitals and one against a physician network.
       Despite all this, Sen. Orrin Hatch (R-Utah), who heads the 
     Senate Judiciary Committee, recently said special antitrust 
     rules for not-for-profit hospitals may be in order after he 
     heard testimony from hospital executives, their lawyers and 
     their consultants. Earth to Sen. Hatch.
       Where are the buyers in this debate? The managed-care 
     plans? The employers? The patients? Somehow, they've largely 
     been left out of the antitrust policy reviews.
       At first, newly consolidated hospitals and physicians will 
     find it easy to generate economic efficiencies given the 
     excess capacity and duplicated services in many markets. Only 
     time will tell if they pass those benefits along to the 
     public or use their power to stifle new competition. Let's 
     hope somebody with influence is watching.



     

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