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March 2022

Turnabout and Fair Play: The Changing Antitrust Enforcement Landscape

Changing political tides have launched the FTC on a course of more aggressive enforcement of the antitrust laws – one marked, in particular, by greater hostility toward mergers and acquisitions.  Even some FTC Commissioners called this sea change a “daft attempt … to chill M&A activity in the United States.”

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May 2021

The New Vertical Merger Guidelines and Health Care Integration

With the publication of new Vertical Merger Guidelines, federal antitrust enforcers signaled their intent to drill down harder on transactions in industries characterized by a high degree of vertical integration.  Health care is near the top of the list.  Understanding the changing enforcement policy is essential to keeping the pathway open for future health system integration.

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June 2020

Certainty and(or) Change

Change can come in unexpected ways from unexpected places. Antitrust developments outside of
health care have meaningful implications for providers and insurers. And physician practice acquisitions are the new antitrust flash point for health systems.

Publication Archives

Thinking Big: Market Power in Consolidating Health Care Markets

Continuing horizontal and vertical integration—both within and outside of health care—is creating a renewed debate over the meaning of market power, and whether the antitrust laws have become too myopic in failing to arrest the potential harms to competition allegedly created by larger and more diversified economic enterprises.  Although much of the debate has focused on monopoly technology firms, it has clear implications for health care enterprises.

Standalone Hospitals: Are They Really Dinosaurs

We examine the circumstances under which independent institutions can thrive.

Cross-Market Effects in Hospital Mergers: A Collision of Economic and Legal Theory 

Today, many more health care combinations involve hospitals and systems in separate geographic markets – a play for scale in a population health management world.  The assumption has been that these transactions raise no antitrust concerns by definition.  After all, if the parties are in separate markets, they are not competitors, and their combination doesn’t create market power that leads to higher prices.  Or does it?  Some economic experts are pursuing a theory of “cross-market effects,” which posits that mergers between hospitals in entirely separate geographic markets can create market power resulting in higher prices for health plans and, consequently, for consumers.  The FTC and state enforcers are increasingly interested in this theory.

Something Old, Something New: Accounting for Accountable Care in Antitrust Analysis

This article takes a deeper dive into the themes explored in my earlier article, Centrality, Competition, and Health Reform, in light of continuing developments including particularly the decision in FTC v. St. Luke’s Health System.  It examines the relationship between accountable (value-based) care and competition and the viability of accountable care as an efficiency argument in merger review.  It also discusses the need for empirical research concerning several critical questions.

Getting To The Finish Line: Avoiding Gun-Jumping And Other False Starts In Pre-closing Antitrust Compliance

There are few more persistent questions than that of how to comply with the antitrust laws during the negotiation of a merger, joint venture, or other alignment transaction.  Planning for future business operations, pre-closing due diligence, and negotiation of definitive agreements all pose compliance traps for the unwary.  Moreover, parties to such transactions are too-often naïve regarding the risks they can create for themselves in reports, memos, emails, and other documents generated as part of the negotiation and assessment of the deal.  This article, co-authored with Ken Vorrasi and Krissy Laubach, provides a roadmap through these obstacles.

Centrality, Competition, and Health Reform: Hospital-Physician Integration and the Antitrust Laws

The convergence of value-based care (jump-started by the Affordable Care Act) and antitrust enforcement creates significant conflict as health systems seek to acquire, or develop dedicated relationships with, physician practices.  The antitrust posture of hospital-physician alignment is certainly more complex than hospital mergers.  This article examines the antitrust challenges both in creating a more integrated health system and in the operations of a vertically aligned system.

Collaboration Without Sin?—Health Care Mergers, Joint Ventures, and the Changing Antitrust Landscape

“Every sin is the result of a collaboration.”  In the aftermath of the 2010 revision of the federal Merger Guidelines, this article examines the recent evolution of merger enforcement theories and their implications for health care mergers, along with the question of whether the FTC Act confers authority on the FTC to expand the definition of conduct constituting an antitrust violation. This article also examines the implications for joint ventures of the Supreme Court’s decision in American Needle, a decision touching on the Copperweld-related issues discussed in my earlier article with Fatema Zanzi, In Necessary Things, Unity.

“In Necessary Things, Unity”— Conspiracies, Copperweld, and Health Care Joint Ventures

In provider collaborations short of full consolidation, the question always must be asked whether sufficient integration exists to escape Section 1 liability, e.g., for price-fixing or dividing markets.  Hospital-physician joint ventures, such as for ambulatory surgery centers, notably pose this question in terms of whether the hospital can lawfully negotiate with health plans on behalf of the JV.  This paper, co-authored with Fatema Zanzi, examines the progeny of the Supreme Court’s Copperweld decision and provides a checklist for assessing joint venture integration.

Field of Dreams: Dominant Health Plans and the Search for a “Level Playing Field”

Some issues never seem to resolve.  For decades, the provider community has argued that health plans are given a wide berth by antitrust regulators as they amass market power, while provider consolidations are routinely challenged, leading to assertions that a “level playing field” does not exist.  

This article explores the ways in which health plans can exploit market power, the economics of “monopsony” (i.e., monopoly buyers) and the question of whether the antitrust laws provide (or could provide) meaningful remedies.