Clinical Integration in a Red Hot Antitrust Environment Horty, - PDF document

Clinical Integration in a Red Hot Antitrust Environment Clinical Integration in a Red Hot Antitrust Environment Horty, Springer & Mattern A story of:  Cost  Quality  Access 1

Clinical Integration in a Red Hot Antitrust Environment Idaho’s largest health system decided to acquire Idaho’s largest physician practice. What could go wrong? 2

Clinical Integration in a Red Hot Antitrust Environment Lawsuits By  Idaho Attorney General  FTC  Competitors 5 Charges:  High rates for ancillary services due to its size  Encourages PCPs (60% of market) to direct patients to St. Luke’s  Threat to monopolize (though competitors are also giants) 6 3

Clinical Integration in a Red Hot Antitrust Environment Defenses:  Doctors not employed; could quit and work with competitors anytime  No non-compete agreements  No obligation to refer only to St. Luke’s 7 JUDGE RULES ST. LUKE’S MUST GIVE UP SALTZER MEDICAL GROUP January 24, 2014 4

Clinical Integration in a Red Hot Antitrust Environment 1. Would create too much power over payers. 2. Would have 80% of PCPs in Nampa. 5

Clinical Integration in a Red Hot Antitrust Environment 3. Judge commented on how expensive health care is, despite its failure to match that with high quality. Summer 2014 Appeal to 9 th Circuit Advances 6

Clinical Integration in a Red Hot Antitrust Environment Antitrust In a Medical Staff Setting? All “unassigned patients” to hospitalists? 7

Clinical Integration in a Red Hot Antitrust Environment PMG must refer internally? All hospitalists must meet:  Daily/early rounds  See patient within 45 minutes of arrival  CPOE Rules  Discharges by 11:00 a.m. … 8

Clinical Integration in a Red Hot Antitrust Environment Antitrust Laws Assumption: Competition will yield lower prices, increased output, and/or higher quality. The antitrust laws protect competition, not competitors. 9

Clinical Integration in a Red Hot Antitrust Environment Just because it makes good business sense doesn’t mean it’s legal. Just because government policy promotes integration doesn’t mean you’re allowed to do it. 10

Clinical Integration in a Red Hot Antitrust Environment Sherman 1 (15 U.S.C. §1) Prohibits:  Contract, combination or conspiracy  Unreasonable restraint of trade Critical Element: Collective Behavior 11

Clinical Integration in a Red Hot Antitrust Environment Per Se vs. Rule of Reason Per Se Violations  Market allocation  Price-fixing  Group boycott 12

Clinical Integration in a Red Hot Antitrust Environment Result 1996 Guidelines: Clinical Integration Antitrust Enforcers Can:  Enjoin arrangement  Prosecute  Sculpt 13

Clinical Integration in a Red Hot Antitrust Environment Commonwealth v. Partners Healthcare System The Rodin of Antitrust Enforcement Tips for Heading Off Legal Issues  Develop Rationale: Cost, Quality, Access  Do not meet with competition without counsel  Engage timely government, payers  Remember, loose lips invite/extend litigation  Ban email or any other indelible communication that does not require thinking! 14