U.S. Unveils Health Industry Antitrust Guidelines

Only a day after the official death of health care reform, the Clinton Administration unveiled antitrust guidelines Tuesday that detail the circumstances under which hospitals, doctors and other health care providers may discuss mergers, acquisitions and joint ventures--and thus seem likely to quicken the pace of consolidations throughout the industry.

The guidelines should expedite “pro-competitive, cost-lowering transactions” that reduce aggregate health care spending as well as individual, out-of-pocket costs for consumers, said Anne K. Bingaman, assistant attorney general for antitrust.

The promulgation of the new and expanded guidelines, which number 106 pages, is clear recognition of the fact that the medical industry has been undergoing broad realignment even in the absence of legislation on health reform--and of clear rules of conduct for providers.

The timing of the Justice Department announcement--a day after Senate Majority Leader George J. Mitchell (D-Me.) threw in the towel on health care reform--was a coincidence, since the latest rules have been in the making for a year.

But the action nevertheless underscored the Administration’s determination to stay active in the health care reform arena despite the demise of what was to have been the centerpiece of the President’s first term in office.

Moreover, the guidelines further illuminated the ongoing sea changes in the vast medical-industrial complex, which is quickly altering the way most Americans receive and pay for health care.

As a way to cut costs, hospitals throughout the country have been merging at a dizzying pace. At the same time, big insurance companies have been organizing fast-growing and highly cost-conscious managed care networks that are increasingly popular with employers.

The controversy over antitrust considerations also points up one of the many issues over which odd alliances were formed that helped doom the President’s health reform initiative.

Urgently seeking antitrust relief are the nation’s doctors, who want to be able to get together and set prices, market their services and engage in other collaborative practices--to compete squarely with the increasingly powerful managed care networks.

Fighting the physicians is an unlikely alliance of consumer groups and health insurers, who say that if doctors are allowed to operate with immunity from antitrust laws, they will form price-gouging cartels and squeeze non-physicians out of the market.

In all, Bingaman and Federal Trade Commission Chairwoman Janet D. Steiger unveiled nine guidelines--three new ones and the others expansions of rules issued a year ago.

For instance, a 1993 guideline allowed hospitals to enter into joint ventures to buy and operate new high-tech equipment; that rule has been expanded to include existing medical equipment as well.

Seven of the guidelines define “safety zones” of conduct--essentially areas of protected behavior that will not be challenged except under certain, unspecified “extraordinary circumstances.”

Another 1993 guideline permitted competing hospitals under certain conditions to participate in surveys of prices, wages and fees; now this “safety zone” has been broadened to cover all groups of providers.

The rules were hailed by Sen. Howard M. Metzenbaum (D-Ohio), who said they should “help doctors, hospitals, nurses and rural providers better understand how the antitrust laws apply to new kinds of mergers, joint ventures, networks and other deals.”