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References
Complete lists of participants on these and other panels are available infra Appendix A and in the Agenda, at http://www.ftc.gov/ogc/healthcare hearings/completeagenda.pdf.
See Stephen Heffler et al., Trends: Health Spending Projections Through 2013, 2004 Health Affairs (Web Exclusive) W4-79, 80 ex.1 (2004), at http://content.healthaffairs.org/cgi/reprint/hlthaff.w4. 79v1.pdf.
Id. at 81 ex.2.
Centers for Medicare & Medicaid Services, Health Accounts: National Health Expenditures 1965–2013, History and Projections by Type of Service and Source of Funds: Calendar Years 1965–2013, at http://www.cms.hhs.gov/statistics/nhe/default.asp#download (last modified Mar. 24, 2004).
Heffler et al., supra note 2, at 80 ex.1.
Stephen Heffler et al., Health Spending Projections For 2002–2012, 2003 Health Affairs (Web Exclusive) W3-54, 63, at http://content.healthaffairs.org/cgi/reprint/hlthaff.w3.54v1.pdf.
GailB. Agrawal & Howard R. Veit, Back to the Future: The Managed Care Revolution, 65 Law & Contemp Probs. 11, 49 (2002) (stating that “reliance on medical judgment is inevitable in the complex cases that account for the majority of health care spending.”).
SeeGeneral Accounting Office, Physician Supply Increased in Metropolitan and Nonmetropolitan Areas but Geographic Disparities Persisted 6 (2003) (reporting that metropolitan areas have more of the facilities and equipment on which physicians depend than nonmetropolitan areas and that specialists prefer to practice in metropolitan areas because they handle less prevalent but more complicated illnesses), available at http://www.gao.gov/atext/d04124.txt; Institute of Medicine, the Nation’s Physician Workforce: Options for Balancing Supply and Requirements 69 (1996) (“[A]n abundance of physicians will not solve the problems of maldistribution by geographic area or specialty.”).
For a discussion of the messenger model, see infra notes 110–132, and accompanying text. For a discussion of clinical integration, see infra notes 249–281, and accompanying text. As discussed in Chapter 1, capitation involves a physician assuming responsibility for a certain number of patients and receiving a fixed amount for each of these patients regardless of whether those patients seek care.
Joint ventures employ varying payment options, including capitated contracts, fee-for-service payment, and pay-for-performance incentives. For a discussion of physician payment arrangements, see infra notes 97–109, and accompanying text, and supra Chapter 1. Joint ventures also employ varying strategies to make themselves more attractive to MCOs, including integrating financially, clinically, or both. For a discussion of integration, see infra notes 249–281, and accompanying text.
Gordon D. Brown, Independent Practice Associations, in Integrating The Practice of Medicine a Decision Maker’s Guide to Organizing and Managing Physician Services 289, 290 (Ronald B. Connors ed., 1997); Peter R. Kongstvedt et al., Integrated Health Care Delivery Systems, in Essentials of Managed Health Care 35 (Peter R. Kongstvedt ed., 4th ed. 2003); Kevin Grumbach et al., Independent Practice Association Physician Groups in California, 17 Health Affairs 227, 227 (May/June 1998). For a discussion of MCOs, see supra Chapter 1.
See Brown, supra note 12, at 290–92.
See Lawrence Casalino, IPA Overview 4 (9/25/02) (slides) [hereinafter Casalino Presentation], at http://www.ftc.gov/ogc/healthcarehearings/docs/030925lawrencecasalino.pdf; Robin R. Gillies et al., How Different is California? A Comparison of U.S. Physician Organizations, 2003 Health Affairs (Web Exclusive) W3-492, 494 (observing that hospitals or HMOs own 18% of non-Californian IPAs, physicians own nearly 70%, and non-physician managers own about 12%. In California hospitals or HMOs own more than 20% of IPAs, physicians own approximately 50%, and non-physician managers own about 25%), at http://content.healthaffairs.org/ cgi/reprint/hlthaff.w3.492v1.pdf.
Grumbach et al., supra note 12, at 230 (noting that 40 percent of Californian IPAs use exclusive contracts for some physicians).
Lawrence Casalino et al., Growth of Single Specialty Medical Groups, 23 Health Affairs 82 (Mar./Apr. 2004); Kongstvedt e t al., supra note 12, at 35; Ginsburg 2/26 at 67.
Kongstvedt et al., supra note 12, at 35.
Casalino 9/25 at 10 (stating that IPAs “were really more of a defensive strategy against managed care.”); Asner 9/25 at 31–32.
Casalino 9/25 at 15, 97; Holloway 9/25 at 100; Asner 9/25 at 126; Doran 2/27 at 217 (stating that physicians bargaining alone lack data and an understanding of the negotiating process); Timothy Lake et al., Medicare Payment Advisory Comm’n, Mpr No. 8568-700, Health Plans’ Selection and Payment of Health Care Providers, 1999, at 120 (2000) (final report) (“Most of the entities were also formed to improve negotiating power or leverage with health plans (67 percent) and to protect market share (78 percent).”).
Casalino 9/25 at 15 (stating that “if you’re a small practice, you might be left out of HMO contracts, but in a large IPA, you’re not likely to be.”); Asner 9/25 at 31; Kongstvedt et al., supra note 12, at 35.
Brown, supra note 12, at 290.
Casalino 9/25 at 7, 12–13, 93 (explaining that “absent risk contracting, IPAs are struggling to find a reason to exist”); Meier 9/25 at 70. But see Asner 9/25 at 32 (stating “IPAs are still a very successful model in the State of California”).
See, e.g., Casalino 9/25 at 6.
Holloway 9/25 at 74.
Health Forum, LLC, affiliate of the American Hospital Ass’n, Hospital Statistics 8 tbl.3 (2000 ed.); Health Forum, LLC, affiliate of the American Hospital Ass’n, Hospital Statistics 10 tbl.3 (2004 ed.).
Casalino Presentation, supra note 14, at 3; Casalino 9 /25 at 6; Gillies et al., supra note 14, at 502.
Meier 9/25 at 68.
Casalino 9/25 at 7.
Gillies et al., supra note 14, at 494.
See Asner 9/25 at 32–34; Casalino 9/25 at 14–16; American Medical Ass’n, Physician IPAs: Patterns and Benefits of Integration, and Other Issues (Sept. 25, 2003) 4 (Public Comment).
Asner 9/25 at 31–33; Peter R. Kongstvedt, Primary Care in Managed Health Care Plans, in Essentials of Managed Health Care, supra note 12, at 92–93; Casalino 9/25 at 14–15. For a discussion of private antitrust litigation involving physician credentialing, see infra notes 241–247, and accompanying text.
See Kongstvedt, supra note 31, at 90 (contending that “[i]f relations between the IPA and the health plan become problematic, the IPA can hold a considerable portion (or perhaps all) of the delivery system hostage to negotiations.”); Casalino 5/28 at 126; Scott D. Danzis, Revising the Revised Guidelines: Incentives, Clinically Integrated Physician Networks and the Antitrust Laws, 87 VA. L. Rev. 531, 535 (2001).
See, e.g., In re Physician Network Consulting, L.L.C., No. C-4094 (Aug. 27, 2003) (decision and order), available at http://www.ftc.gov/os/2003/08/physnetworkdo.pdf; In re Tex. Surgeons, P.A., No. C-3944 (May 18, 2000) (decision and order), available at http://www.ftc.gov/os/2000/05/texas.do.htm; In re N. Lake Tahoe Med. Group, Inc., No. C-3885 (July 21, 1999) (decision and order), available at http://www.ftc.gov/os/1999/08/northtahoe.do.htm; In re Mesa County Physicians Indep. Practice Ass’n, Inc., 127 F.T.C. 56 4 (1999); In re Southbank IPA, Inc., 114 F.T.C. 783 (1991).
See Casalino 9/25 at 17, 19; James C. Robinson, The Corporate Practice of Medicine 148 (1999) (physician-members are “motivated to... hold down expenses.”).
Asner 9/25 at 38.
Meier 9/25 at 64 (stating that pay for performance “very well could be another example of financial integration.”); see also Casalino 9/25 at 97 (observing that if physicians were paid based on quality, they would “be more interested in developing organized processes to improve quality.”).
Asner 9/25 at 36–37 (also stating “[t]here are 25 other programs that are starting up across the country that are using the pay-for-performance model from California,” which cannot be implemented “with physicians in individual private practices.”).
Gillies et al., supra note 14, at 496–98, 499. Care management strategies include disease management programs, use of guidelines and critical pathways, use o f hospitalists, and the like.
External incentives include outside reporting of patient satisfaction and outcome data, and recognition for quality such as receiving better contracts. Id.
Asner 9/25 at 40.
Id. at 39.
Burkett 9/9/02 at 144–45 (stating that his organization’s clinical integration program provides “benefits for the patients, for the health plans and for the pro viders, all for different reasons, but much of it revolves around the ability to share the information that we use for patient care.”).
Asner 9/25 at 40; Casalino 9/25 at 11 (noting that some IPAs pro-actively try to manage care to control costs and improve quality).
See Hill 9/25 at 145; Hoangmai H. Pham et al., Financial Pressures Spur Physician Entrepreneurialism, 23 Health Affairs 70, 75–76 (Mar./Apr. 2004); Dep’t of Justice & Federal Trade Comm’n, Statements of Antitrust Enforcement Policy in Health Care § 8(B)(1) (1996) (holding that the Agencies require physician network joint ventures to make a “significant investment of capital, both monetary and human, in the necessary infrastructure and capability to realize” sufficient clinical integration efficiencies to enable collective price-setting) [hereinafter Health Care Statements], available at http://www.ftc.gov/reports/hlth3s.pdf.
Peter R. Kongstvedt, Compensation of Primary Care Physicians in Managed Health Care, in Essentials of Managed Health Care, supra note 12, at 118 (“[C]apitation eliminates the FFS incentive to overutilize”). Id. at 120 (“[A] very large body of literature shows that managed care systems have provided equal or better care to members than uncontrolled FFS systems.”).
See, e.g., Kevin Grumbach, Primary Care Physicians’ Experience of Financial Incentives in Managed-Care Systems, 339 New Eng. J. Med. 1516, 1518–19 (1998).
Lawrence Casalino, Canaries in a Coal Mine: California Physician Groups and Competition, 20 Health Affairs 97, 99 (July/Aug. 2001).
Burkett 9/9/02 at 148; Asner 9/25 at 40 (observing that “under clinical integration there can be monitoring and managing chronic patients, and this will ensure high-quality, cost-effective care.”).
Asner 9/25 at 33.
Robinson, supra note 34, at 147 (“Cardiology in the... region experienced a 30 percent drop in hospital utilization and a 20 percent drop in claims costs in the first year.”).
Lawrence Casalino et al., External Incentives, Information Technology, and Organized Process to Improve Health Care Quality for Patients with Chronic Disease, 289 JAMA 434, 439 (2003).
Thomas Bodenheimer et al., Primary Care Physicians Should Be Coordinators, Not Gatekeepers, 281 JAMA 2045, 2048 (1999).
Lawton R. Burns & Darrell P. Thorpe, Physician-Hospital Organizations: Strategy, Structure, and Conduct, in Integrating The Practice of Medicine, supra note 12, at 352; Miles 5/8 at 6; Guerin-Calvert 5/8 at 15.
See generally Marren 5/8 at 30 (remarking that “if you have seen one PHO, you have seen one PHO.”); Guerin-Calvert 5/8 at 20.
Kongstvedt et al., supra note 12, at 43; Burns & Thorpe, supra note 53, at 353; Alison Evans Cuellar & Paul J. Gertler, Strategic Integration of Hospitals and Physicians 9 (May 1, 2002) (unpublished manuscript), at http://faculty.haas.berkeley.edu/gertler/working_papers/hospital_VI_5_10_02.pdf.
Cuellar & Gertler, supra note 55, at 10; Kongstvedt et al., supra note 12, at 43, 45 (mentioning the emergence in recent years of closed PHOs with only one type of specialist); Marren 5/8 at 37 (nothing that there are not many exclusive PHOs); Burns & Thorpe, supra note 53, at 353.
Kongstvedt et al., supra note 12, at 43–44. Many PHOs have found it difficult to get the necessary information in a timely manner so as to profile physician-members comprehensively. An additional complication is dealing with physicians who refuse to adhere to profiling requirements after they become members of a PHO. For a discussion of the antitrust issues related to physician credentialing, see infra notes 241–247, and accompanying text.
Kongstvedt et al., supra note 12, at 43.
For a discussion of the antitrust issues associated with clinical and financial integration, see infra notes 252–281, and accompanying text.
See, e.g., Guerin-Calvert 5/8 at 15, 18–20.
Kevin J. Egan & Rebecca L. Williams, Vertically Integrated Networks, in Health Care Corporate Law: Managed Care § 5.12.2, at 5–105 to 5–107 (Mark A. Hall & William S. Brewbaker III eds., 1999 & Supp. 1999); Kongstvedt et al., supra note 12, at 42.
Kongstvedt et al., supra note 12, at 42; Egan & Williams, supra note 61, § 5.12.2, at 5–105.
Egan & Williams, supra William S. Brewbaker III eds., 1999 & Supp. 1999) note 61, § 5.12.2, at 5–105.
Julie Y. Park, PHOs and the 1996 Federal Antitrust Enforcement Guidelines: Ensuring the Formation of Procompetitive Multiprovider Networks, 91 Nw. U. L. Rev. 1684, 1692 (1997).
See Burns & Thorpe, supra note 53, at 353.
See Miles 5/8 at 9; Burns & Thorpe, supra note 53, at 353; Weis 5/8 at 38–39 (describing the Advocate Health Care Network, which comprises eight PHO joint ventures, including 2,400 independently practicing physicians and eight Advocate hospitals).
Burns & Thorpe, supra note 53, at 352; see also Weis 5/8 at 38; Miles 5/8 at 4; Kongstvedt et al., supra note 12, at 41–42; Egan & Williams, supra note 61, § 5.12.2, at 5–105.
Burns & Thorpe, supra note 53, at 352.
Stephen J. Kratz, Taylor & Company and American Ass’n of Itegrated Healthcare Delivery Systems (AAIHDS), Perspecitives on Integrated Delivery Systems and Ds Executives 2 (1998/99).
Health Forum (2004 ed.), supra note 25, at 10 tbl.3.
See Guerin-Calvert 5/8 at 14–15; Miles 5/8 at 6–7.
Miles 5/8 at 4; Guerin-Calvert 5/8 at 17–18 (establishing that fewer PHOs are involved in full-risk contracting); Weis 5/8 at 76; Ginsburg, 2/26 at 67–68 (noting “a sharp decline in physician hospital organizations”); Lesser 9/9/02 at 83–84 (stating that PHOs are less relevant following the decline in risk contracting). But see Babo 5/8 at 41 (describing Advocate Health Partners’ use of full risk contracts with managed care). For a discussion of PPOs, see infra Chapter 5.
See Miles 5/8 at 4–5; Marren 5/8 at 36–37; Nathan S. Kaufman, Market Dominance of PHO Entities, Healthcare Fin. Mgmt., Aug. 1998 (“Many PHOs are either unprofitable, unsuccessful at developing new business, or stalemates by politics”); Lawton R. Burns & Mark V. Pauly, Integrated Delivery Networks: A Detour on the Road to Integrated Health Care?, 21 Health Affairs 128, 128 (July/Aug. 2002). One survey found that the number of PHOs declined from 1446 in 1994 to 1114 in 2002. Health Forum (2000 ed.), supra note 25, at 8 tbl. 3; Health Forum (2004 ed.), supra note 25, at 10 tbl.3.
See Miles 5/8 at 6–7.
The Agencies have brought a number of cases alleging that PHOs violated the antitrust laws. See, e.g., In re Piedmont Health Alliance, Inc., No. 9314 (Dec. 24, 2003) (complaint), available at http://www.ftc.gov/os/caselist/0210119/031222comp 0210119.pdf; In re S. Ga. Health Partners, L.L.C., No. C-4100 (Oct. 31, 2003) (complaint), available at http://www.ftc.gov/os/2003/11/sgeorgiacomp.pdf; In re Me. Health Alliance, No. C-4095 (Aug. 27, 2003) (complaint), available at http://www.ftc.gov/os/2003/08/mainehealthcomp.pdf; United States v. Health Choice of Nw. Mo., No. 95-6171-CV-SJ-6 (W.D. Mo., filed Sept. 13, 1995) (complaint); United States v. Healthcare Partners, N o: 3:95CV01946 (D. Conn., filed Sept. 13, 1995) (complaint); United States v. Women’s Hosp. Found., N o. 96-389-BM2 (M.D. La., filed Apr. 23, 1996) (complaint).
Egan & Williams, supra William S. Brewbaker III eds., 1999 & Supp. 1999 note 61, § 5.12.6, at 5–110; Kongstvedt et al., supra note 12, at 44; B urns & Thorpe, supra note 53, at 354; Weis 5/8 at 44; Park, supra note 64, at 1695.
See Kaufman, supra note 73, at 3; Egan & Williams, supra note 61, § 5.12.6, at 5–110. Presumably, such PHOs are integrated sufficiently to avoid per se condemnation under the antitrust laws.
Egan & Williams, supra William S. Brewbaker III eds., 1999 & Supp. 1999 note 61, § 5.12.6, at 5–110; Dalkir 5/8 at 68 (observing that efficiencies can be derived from physicians organizing as a group and from physicians and hospitals integrating).
See Egan & Williams, supra William S. Brewbaker III eds., 1999 & Supp. 1999 note 61, § 5.12.6, at 5–110; Miles 5/8 at 10 (explaining that PHO physicians can refer their patients to other PHO participants, which has “obvious[] pro-competitive and efficiency justifications.”). But cf. Buxton 5/8 at 50 (suggesting intra-organization referrals may result in overuse).
Egan & Williams, supra William S. Brewbaker III eds., 1999 & Supp. 1999 note 61, § 5.12.6, at 5–110.
Burns & Thorpe, supra note 53, at 353; see also Burns 4/9 at 70; Kongstvedt et al., supra note 12, at 41–42. But see Miles 5/8 at 79 (observing that managed care plans can have a phobia of dealing with provider networks because the plans assume the networks form only to obtain higher fees).
Cuellar & Gertler, supra note 55, at 7; see also Guerin-Calvert 5/8 at 21–23; Dalkir 5/8 at 26; Buxton 5/8 at 51–52 (listing examples of physician groups demanding significant fees). For further discussion of physician collective bargaining, see infra notes 133–178, and accompanying text.
Buxton 5/8 at 50; see also Hurley 4/9 at 18.
Stephen M. Shortell et al., Remaking Health Care in America: The Evolution of Organized Delivery Systems 26 (2nd ed. 2000).
Cuellar & Gertler, supra note 55, at 25–26.
Federico Giliberto & David Dranove, The Effect of Physician-Hospital Affiliations on Hospital Prices in California 1 (Nov. 30, 2003) (unpublished manuscript) (finding that highly integrated hospital and physician structures may slightly reduce prices); Kaufman, supra note 73, at 1 (discussing research that “showed no correlation between a hospital’s physician integration strategy and its payments under managed care. There is, however, a high correlation between a hospital’s payments under managed care and its institutional market position. Dominant hospital systems got paid better than marginal hospitals regardless of whether they had a PHO.”).
See Kongstvedt et al., supra note 12, at 44–45; Burns & Thorpe, supra note 53, at 354.
Kongstvedt et al., supra note 12, at 44–45.
Marren 5/8 at 34; Weis 5/8 at 46 (discussing the crucial role clinical integration can play in creating efficiencies and improving patient safety); Miles 5/8 at 79–80; Guerin-Calvert 5/8 at 23; Babo 5/8 at 60; Vogt 9/9/02 at 69; Park, supra note 64, at 1693–94 (stating that “PHOs may permit... consumers to obtain high quality at a lower price by conducting or developing systems for utilization review and quality assurance.”); Cuellar & Gertler, supra note 55, at 4. But see Burns 4/9 at 77–78.
See Cuellar & Gertler, supra note 55, at 4; Guerin-Calvert 5/8 at 18–19.
See Weis 5/8 at 41–42, 60–62
Id. at 60–62.
See Id. at 60–62; Marren 5/8 at 31–32 (stating that physicians do not self-organize very well). But see Kaufman, supra note 73, at 2 (stating that “[h]ospitals... are less motivated than [physician practice management companies] to extract profit growth from the physician practices they purchase and/or manage.”).
Guerin-Calvert 5/8 at 17; see also Marren 5/8 at 34–35, 36–37; Weis 5/8 at 61 (observing that “some form of clinical or financial integration is necessary in order to achieve quality improvement, cost reduction and better patient safety.”); Burns & Thorpe, supra note 53, at 354.
Miles 5/8 at 5, 7 (citing antitrust concerns and the refusal of a state antitrust bureau to accept clinical integration for antitrust analysis purposes); see also Timothy S. Snail & James C. Robinson, Organizational Diversification in the American Hospital, 19 Ann. Rev. Pub. Health 417, 423 (1998).
Buxton 5/8 at 49–50 (suggesting also that intra-organization referrals may result in overuse).
Sherry Glied, Managed Care, in 1A Handbook Of Health Economics (Anthony J. Culyer & Joseph P. Newhouse, eds. 2000). The payment arrangement that insurers use to pay a physician network joint venture may be different from the arrangement those joint ventures use to pay their physician members. See James C. Robinson, Blended Payment Methods in Physician Organizations Under Managed Care, 282 JAM A 1258, 1258 (1999).
See Academy for Health Management, A Glossary of Managed Care Terms, at http://www.aahp.org/glossary/index.html (last visited June 22, 2004).
See, e.g., Kongstvedt, supra note 45, at 123 (noting that sicker patients require more care and doctors practicing on a FFS basis get paid more for their time, energy and skills applied to such patients).
See, e.g., David Orentlicher, Paying Physicians More To Do Less: Financial Incentives to Limit Care, 30 U. Rich. L. Rev. 155, 158 (1996); GLIED, supra note 97, at 723–25.
Orentlicher, supra note 100, at 158–159; Casalino 9/25 at 7; Glied, supra note 97, at 714–16.
Kongstvedt, supra note 45, at 118.
See, e.g., Orentlicher, supra note 100, at 158–59.
See Carol K. Kane & Horst Loeblich, Physician Income: The Decade in Review, inAmerican Medical Ass’n, Physician Socioeconomic Statistics 7 (2002 ed.) (noting that approximately 35 percent of physicians are salarybased employees).
Kongstvedt et al., supra note 12, at 48 (discussing the use of salaries to capture economies of scales and to apply capital resources most effectively).
Orentlicher, supra note 100, at 159; Henry T. Greely, Direct Financial Incentives in Managed Care: Unanswered Questions, 6 Health Matrix 53, 57 (1997).
See generally American Medical Ass’n, RVS Update Process (2002), at http://www.ama-assn.org/ama1/pub/upload/mm/380/rucbooklet.pdf. For a discussion of trends in Medicare spending on physician services, seeGeneral Accounting Office, Medicare Physician Payments (2004), available at http://www.gao.gov/new.items/d04751t.pdf.
See American Medical Ass’n, supra note 107.
Kongstvedt, supra note 45, at 127 (stating that private payors paid physicians 20 percent more than the Medicare amount in 1999).
Health Care Statements, supra note 44, § 9(C); Raskin 9/25 at 174.
Health Care Statements, supra note 44, § 9(C); see also Arthur N. Lerner & David M. Narrow, PPO Programs and the Antitrust Laws, inThe New Healthcare Market: A Guide to Ppos for Purchasers, Payors and Providers 858 (Peter Boland ed., 1985).
Douglas C. Ross, Physician IPAS: Messenger Model 5(9/25) (slides) [hereinafter Ross Presentation], at http://www.ftc.gov/ogc/healthcarehearings/docs/030925douglasross.pdf; Ross 9/25 at 150–51 (also acknowledging that physicians infrequently implement the traditional messenger model).
Ross Presentation, supra note 112, at 5; Ross 9/25 at 150; Kim H. Roeder, The 1996 Antitrust Policy Statements: Balancing Flexibility and Certainty, 31 Ga. L. Rev. 649, 671 (1997) (“The key to the Messenger Model [is] that the individual providers [make] independent, unilateral decisions irrespective of what other providers would do and regardless of the views of the agent acting as the messenger.”).
Ross 9/25 at 150.
Edward Hirshfeld, Interpreting the 1996 Federal Antitrust Guidelines for Physician Joint Venture Networks, 6 Ann. Health L. 1, (1997); Ross 9/25 at 151.
Hirshfeld, supra note 115, at 29; Ross 9/25 at 151.
Hirshfeld, supra note 115, at 29; Miles 9/25 at 170.
Hirshfeld, supra note 115, at 29; Miles 9/25 at 167–68.
See, e.g., In re Physician Network Consulting, L.L.C., No. C-4094 (Aug. 27, 2003) (decision and order), available at http://www.ftc.gov/os/2003/08/physnetworkdo.pdf; In re Carlsbad Physician Ass’n, No. C-4081 (June 13, 2003) (decision and order), available at http://www.ftc.gov/os/2003/06/carlsbaddo.htm; In re SPA Health Org., No. C-4088 (July 17, 2003) (decision and order), available at http://www.ftc.gov/os/2003/07/spahealthdo.pdf; United States v. Fed’n of Physicians & Dentists, Inc., 2002–2 Trade Cas. (CCH) ¶ 73,868 (D. Del., 2002); United States v. Mountain Health Care, P.A., 2003–2 Trade Cas. (CCH) ¶ 74,162 (W.D.N.C. 2003).
See Miles 9/25 at 167 (stating also that “messenger networks can help market their provider’s services, hopefully increasing provider volume”); Lerner 9/25 at 235–36 (suggesting that the messenger model could facilitate a new payor’s entry into local markets by creating provider networks with which the payor could readily contract); Robert Leibenluft, Why Physician Cartels Do Not Need a “Fresh Look” — a Response to the AMA’s Testimony at the FTC Health Care Competition Workshop 5 (Public Comment) [hereinafter links to FTC Health Care Workshop Public Comments are available at http://www.ftc.gov/os/comments/healthcarecomments/index.htm].
Miles 9/25 at 167–168 (stating that messengers can educate physicians and their staff “to make more rational contracting decisions”); Hill 9/25 at 228 (remarking that physicians are not trained to understand contracts and that many physicians have limited interest in such contracts).
Miles 9/25 at 168–169; Lerner 9/25 at 200; Ross 9/25 at 223–224.
Ross 2/25 at 150–151.
Raskin 9/25 at 173 (“I have never found... any business person, any administrator or healthcare professional in any segment of the industry who advocates the use of the messenger model for any business purpose.”); Miles 9/25 at 214–215 (stating that “[m]essenger models are worthless, except as interim tools.”).
Hill 9/25 at 147 (declaring that the messenger model “is cumbersome, it’s difficult to administer, and it’s not surprising that the messenger model is often despised by physicians, hospitals, and to our understand ing even payors.”); J. Edward Hill, Physician IPAs; Messenger Model 4 (9/2 5), at http://www.ama-assn.org/ama1/pub/upload/mm/368/d rhillftcstatement.pdf; Miles 9/25 at 169 (stating that the messenger model is so “cumbersome” to implement and maintain that it is “a pain in the butt”); Jack R. Bierig, Physician-Sponsored Managed Care Networks: Two Suggestions for Antitrust Reform, 6 Health Matrix 115, 122 (1996) (“The messenger model is universally recognized as inefficient and cumbersome, particularly given the thousands of medical procedures and the large numbers of physicians involved in physician networks.”). One panelist noted the concern that physicians might adopt the network fee schedule for use in their own individual practices, thereby leading to increased prices for payors and consumers. This panelist further stated that such concerns have never been empirically estab lished. See Raskin 9/25 at 179–80.
Hill 9/25 at 228; Miles 9/25 at 169–71.
Ross 9/25 at 156 (stating that some versions of the messenger model can lead to “going back and forth potentially forever”); Hill 9/25 at 147; Miles 9/25 at 157 (stating that physicians may provide “very, very high, unrealistic rates” under some messenger arrangements because “they’re not quite sure what they’re getting into”), 171.
Raskin 9/25 at 182–83.
Miles 9/25 at 166–7.
Marx 9/25 at 193–94; Raskin 9/25 at 173–174; Miriam L. Clemons, Don’t Shoot the Messenger: Independent Physicians and Joint Payment Contracting Using the Messenger Model, 32 U. Mem. L. Rev. 927, 949 (2002).
See American Medical Ass’n, Position Paper on Antitrust Relief Legislation [hereinafter AMA Position Paper], at http://www.amaassn.org/ama/pub/article/5910-6004.html (Last updated Oct. 6, 2003); Letter from Michael D. Maves, American Medical Ass’n, to Spencer Bachus & John Conyers, Jr., U.S. House of Representatives (Mar. 21, 2003) (regarding HR 1120, the “Health Care Antitrust Improvements Act of 2003”) (asserting that “insurers are using these contracts to gain increased control over how medical care is delivered”) [hereinafter AMA Letter], at http://www.ama-assn.org/ama/pub/article/5908-7508.html. See generally Foreman 5/7 at 20–26 (representing the AMA); Stephen Foreman, Countervailing Market Power (5/7) (slides), at http://www.ftc.gov/ogc/healthcarehearings/docs/030507foreman.pdf; Donald P almisano, Taking the Payer Side Seriously: Why the Federal Trade Commission Should Redirect Its Efforts in Health Care Antitrust Enforcement (9/9/02) [hereinafter Palmisano (stmt)], at http://www.ama-assn.org/ama/pub/article/5911-6710.html; Crane 5/7 at 34–40 (noting health plan consolidation and trend away from HMOs and capitation, and suggesting that the FTC and Justice Department revise Health Care Statement 8 of the Health Care Statements to allow more latitude to IPAs); Donald Crane, Statement (5/7), at http://www.ftc.gov/ogc/healthcarehearings/docs/030507doncrane.pdf; Fred Hellinger & Gary Young, An Analysis of Physician Antitrust Exemption Legislation: Adjusting the Balance of Power, 286 JAMA 83 (2001).
Levy 9/26 at 45; Connair 9/26 at 23 (stating that “insurers have been able to strong-arm physicians into signing one-sided contracts that give managed care insurers the legal right to deny care, compromise optimal care, and unfairly squeeze doctors financially.”). Countervailing power involves sellers (or buyers) faced with buyer (or seller) market power acquiring their own market power (i.e., by negotiating collectively and engaging in other behavior that would otherwise be prohibited by the antitrust laws) to offset that monopsony or monopoly power. See infra notes 150–165, and accompanying text.
Sujit Choudhry & Troyen A. Brennan, Collective Bargaining by Physicians — Labor Law, Antitrust Law, and Organized Medicine, 345 NEW ENG. J. MED. 1141 (2001).
See, e.g., Marc L. Leib, White Coats and Union Labels: Physicians and Collective Bargaining, 42 Ariz. L. Rev. 803, 812–13 (2000).
National Labor Relations Act (NLRA), 29 U.S.C. § 157 (2004); Leib, supra note 136, at 813 (stating that the NLRA creates “a legally enforceable right for employees to organize,” requires “employers to bargain with employees through employee elected representatives,” and gives “employees the right to engage in concerted activities for collective bargaining purposes or other mutual aid or protection.”); Flaherty 9/26 at 30–31. Employee bargaining rights vary, depending on whether the physician works for a firm or the federal or state government.
Jeremy Lutsky, Is Your Physician Becoming a Teamster: The Rising Trend of Physicians Joining Labor Unions in the L ate 1990’s, 2 Depaul J. Health Care L. 55, 78 (1997); Levy 9/26 at 41–42. Some commentators have suggested however that the National Labor Relations Board and the courts “may yet conclude that some physicians that contract with MCOs are de facto employees and thus should be entitled to bargain collectively under the NLRA.” W illiam S. Brewbaker III, Physician Unions and the Future of Competition in the H ealth Care Sector, 33 U.C. Davis L. Rev. 545, 564; Leib, supra note 136, at 819–23. In this Report, “collective bargaining” can refer to bargaining by union members, which is authorized by the NLRA, or non-unionized physicians’ attempts to obtain the right to bargain collectively.
See Flaherty 9/26 at 32 (stating that in certain states, including Texas and New Jersey, the state attorney general regulates physician collective bargaining); Ameringer 9/26 at 16; Tobey 5/7 at 47–52 (discussing Texas’s experience); Mark Tobey, Prepared Remarks (5/7), at http://www.ftc.gov/ogc/ healthcarehearings/docs/030507tobeytestimony.pdf. For a discussion of the state action doctrine, see infra note 286, and accompanying text, and infra Chapter 8.
SeeTodd J. Zywicki et al., Federal Trade Comm’n, No. P011200, Report of the State Action Task Force 67 (2003) (stating that legislatures in Ohio, Washington, and Alaska considered passing such legislation in 2002), at http://www.ftc.gov/os/2003/09/stateactionreport.pdf; Leib, supra note 136, at 830 (writing in 2000 that “Illinois, Delaware, the District of Columbia, New Hampshire, New Jersey, New York, and Pennsylvania have introduced bills to allow collective bargaining by physicians.”) (footnote omitted); Quality Health-Care Coalition Act of 1999, H.R. 1304, 106th Cong. (1999) (sponsored by Rep. Tom Campbell); Health Care Antitrust Improvements Act of 2003, H.R. 1120, 108th Cong. (2003)
Letter from Richard A. Feinstein, Federal Trade Commission, to Robert R. Rigsby, Government of the District of Co lumbia (Oct. 29, 1999), at http://www.ftc.gov/be/hilites/rigsby.htm; Letter from Joseph J. S imons, Federal Trade Commission, to Dennis Stapleton, Ohio House of Representatives (Oct. 16, 2002), at http://www.ftc.gov/os/2002/10/ohb325.htm; Letter from Joseph J. Simons, Federal Trade Commission, to L isa Murkowski, Alaska House of Representatives (Jan. 18, 2002), at http://www.ftc.gov/be/v020003.pdf.
Ameringer 9/26 at 10–12 (stating that organized medicine “saw unions as a thr eat to professional... turf, and as antithetical to professional values of individualism and autonomy.”).
Id. at 7–8.
Id.
The AMA also supported federal legislation that would allow physicians to bargain collectively, claiming it would “reduce the critical imbalance in the health care marketplace and restore some power to physicians so they can act in the best interests of their patients.” AMA Letter, supra note 133. The Pennsylvania Medical Society has similarly suggested that “regulatory and countervailing power approaches may produce welfare-improving outcomes.” Stephen Foreman & Dennis Olmstead, Written Comments of the Pennsylvania Medical Society 3 (9/9/02, dated Sept. 30, 2002), at http://www.ftc.gov/ogc/healthcare/pms.pdf.
Flaherty 9/26 at 29.
See Ameringer 9/26 at 15–16; Flaherty 9/26 at 29.
Joseph Weber, I Dreamed I Saw Dr. Joe Hill Last Night; Tensions are running high in the American Medical Assn. over a divisive question: Should doctors form labor unions?, Bus. Week Online, June 20, 2002; see also Lindsey Tanner, Doctors Union Battles for Survival, Associated Press, May 9, 2002; Sara D. White, For the Record, Crain’s Chicago Business, May 13, 2002.
News Statement, Michael D. Maves, American Medical Ass’n, AMA separation from PRN (Mar. 10, 2004), at http://www.ama-assn.org/ama/pub/article/1617-8441.html; Physicians for Responsible Negotiation, at http://www.4prn.org (last visited July 8, 2004).
AMA Letter, supra note 133.
See, e.g., AMA Position Paper, supra note 133; AMA Letter, supra note 133 (asserting that “insurers are using these contracts to gain increased control over how medical care is delivered”); Catherine Hanson, On Integration, Physician Joint Contracting, and Quality: Taking a Fresh Look at Some “Settled” Questions (9/9/02), at http://www.ftc.gov/ogc/healthcare/hanson.pdf; Palmisano (stmt), supra note 133.
See Foreman 5/7 at 54; Crane 5/7 at 35 (stating that California is a “a textbook example of monopsony power” because health care insurer mergers have left California with fewer, more dominant health care insurers); George Koenig, Additional Testimony Subsequent to FTC Workshop on Health Care and Competition Law and Policy (Sept. 16, 2002) 2 (Public Comment); Meghrigian 9/24 at 85; American M edical Ass’n, Competition in Health Insurance: A Comprehensive Study of U.S. Markets Executive Summary (2003), at http://www.ama-assn.org/ama/pub/category/12246.html.
See Leibenluft 5/7 at 42–43; Noether 5/7 at 29, 32; Monica Noether et al., Charles River Associates, Competttio in HEALTH INSURANCE and PHYSICIAN MARKETS: A REVIEW OF “COMPETITION IN HEALTH INSURANCE: A COMPREHENSIVE STUDY of us MARKETS” BY THE AMERICAN MEDICAL ASSOCIATION (2002) (Public Comment) (Submitted by Robert Leibenluft).
See generally infra Chapter 6.
See, e.g., Foreman 5/7 at 21–22.
See, e.g., Noether 5/7 at 138; Monica Noether, Health Insurance/Providers: Countervailing Market Power (5/7) (slides), at http://www.ftc.gov/ogc/healthcarehearings/docs/030507noether.pdf; Gaynor 5/7 at 138; Greaney 2/27 at 221–222; Matthews 9/24 at 137; Carson-Smith 2/27 at 193; American Bar Ass’n, Comments Regarding The Federal Trade Commission’s Workshop on Health Care and Competition Law and Policy (Oct. 2002) 10–13 (Public Comment) [hereinafter ABA (public cmt)]
Gaynor 5/7 at 19; Martin Gaynor, Countervailing Power in Health Care Markets 12–13 (5/7) (slides), at http://www.ftc.gov/ogc/healthcarehearings/docs/030507gaynor.pdf.
See Leibenluft 5/7 at 40–46; Robert Leibenluft, Statement on Behalf of the Antitrust Coalition for Consumer Choice in Health Care 1–2, 10 (5/7), at http://www.ftc.gov/ogc/healthcarehearings/docs/030507liebenluftt.pdf; Robert Leibenluft, Letter to Member of Congress (Apr. 12, 2002) (Public Comment) (On Behalf of The Antitrust Coalition For Consumer Choice in Health Care).
The Quality Health-Care Coalition Act of 1999: Hearing on H.R. 1304 Before the House Comm. on the Judiciary, 106th Cong. 14 (1999) (Statement of Joel I. Klein, Assistant Attorney General, U.S. Department of Justice) [hereinafter DOJ, H.R. 1304 Statement], at http://www.usdoj.gov/atr/public/testimony/2502.htm.
Robert Pitofsky, Thoughts on “Leveling the Playing Field” in Health Care Markets, Remarks Before the National Health Lawyers Association, Twentieth Annual Program on Antitrust in the Health Care Field (Feb. 13, 1997), at http://www.ftc.gov/speeches/pitofsky/nhla.htm
Gaynor 5/7 at 9; see also Noether 5/7 at 32.
Foreman 5/7 at 22, 25.
But see id. at 23–24.
See Gaynor 5/7 at 12, 13, 16–17; Brewbaker 9/26 at 58 (stating that “it’s just as likely that we would see an additional economic welfare loss from the addition of the second monopoly on the seller’s side”).
Leibenluft 5/7 at 45–46.
Prepared Statement Concerning the “Quality Health-Care Coalition Act of 1999”: Hearing on H.R. 1304 Before the House Comm. on the Judiciary, 106th Cong. 5 (1999) (Statement of Robert Pitofsky, Chairman, Federal Trade Commission) [hereinafter, FT C, H.R. 1304 Statement], at http://www.ftc.gov/os/1999/06/healthcaretestimony.htm; DOJ, H.R. 1304 Statement, supra note 159, at 5.
FTC, H.R. 1304 Statement, supra note 166; Brewbaker, supra note 138, at 549–50 (“Legalized collective bargaining would permit physician unions to function as doctors’ cartels, raising physician fees and organizing professional boycotts of MCOs and other institutions.”).
In re S. Ga. Health Partners, L.L.C., No. C-4100 (Oct. 31, 2003) (decision and order), available at http://www.ftc.gov/os/2003/11/sgeorgiado.pdf.
In re S. Ga. Health Partners, L.L.C., No. C-4100 (Oct. 31, 2003) (complaint), available at http://www.ftc.gov/os/2003/11/sgeorgiacomp.pdf.
See R. Hewitt Pate, Opening Day Comments (2/26), at http://www.ftc.gov/ogc/healthcarehearings/docs/030226pate.pdf; see also United States v. Fed’n of Physicians & Dentists, Inc., 2002–2 Trade Cas. (CCH) ¶ 73,868 (D. Del., 2002).
See supra Chapter 1.
Cong. Budget Office, 106th Cong., H.R. 1304: Quality Health-Care Coalition Act of 1999, at 2 (Cost Estimate, Mar. 15, 2000), at ftp://ftp.cbo.gov/18xx/doc1885/hr1304.pdf.
Id.
SeeHealth Insurance Ass’n of America, The Cost of Physician Antitrust Waivers (2002) (incorporating findings of Charles River Associates, The National Cost of Physician Antitrust Waivers (2002) (5 percent to 7 percent increase)); H.E. Frech III & James Langenfeld, The Impact of Antttrust Exemptions for Health Care Professionals on Health Care Costs 3–4 (2000) (Prepared for the American Ass’n of Health Plans) (estimating “that H.R. 1304 will increase health care expenditures by $141 billion over a five year period, or 8.6 percent of private health care costs during its peak year” and “that by 2003 the bill would cause approximately 3 million more individuals to become uninsured.”), at http://www.aahp.org/DocTemplate.cfm?Section=Antitrust&template=/ContentManagement/ContentDispla y.cfm&ContentID=1849.
William S. Brewbaker III, Will Physician Unions Improve Health System Performance?, 27 J. Health Pol. Pol’y & L. 575, 597 (2002); see generally Jacqueline M. Darrah, Perspectives on Competition Policy and the Health Care Marketplace 11 (2/27) (“However you cut the pie, physician costs today are simply not a significant factor driving growth in overall healthcare costs.”), at http://www.ama-assn.org/ama1/pub/upload/mm/368/febftctestimony.pdf.
Monique A. Anawis, The Ethics of Physician Unionization: What Will Happen If Your Doctor Becomes a Teamster?, 6 Depaul J. Health Care L. 83, 87 (2002); Brewbaker, supra note 175, at 585–86; Jeffrey Rugg, An Old Solution to a New Problem: Physician Unions Take the Edge Off Managed Care, 34 Colum. J.L.& Soc. Probs. 1, 7 (2000); Levy 9/26 at 41, 44–46; Flaherty 9/26 at 74–75.
See, e.g., Brewbaker, supra note 175, at 588–594; Brewbaker, supra note 138, at 575–577 (noting that the principal purpose of unionization is to enhance the working conditions of the unionized employees, with salary a major bargaining point).
See Roger D. Blair & Jill Boylston Herndon, Physician Cooperative Bargaining Ventures: An Economic Analysis, 71 Antttrust L.J. 989, 1014–15 (2004).
AHPs are individuals trained to support, complement, or supplement the professional functions of physicians, dentists, and other health professionals in the delivery of health care to patients. They include physician assistants, dental hygienists, medical technicians, nurse midwives, nurse practitioners, physical therapists, psychologists, and nurse anesthetists. Patricia Franks et al., Univ. of California, Allied Health: 1970S–2000S: A Review of Key Reports 23–24 (2002) (citing U.S. Dep’t of Health, Education, & Welfare, A Report on Allied Health Personnel, DHEW NO. (HRA) 80–28 (1979)), at http://www.futurehealth.ucsf.edu/pdf_files/Allied%20Health%20Key%20Reports%207-30-02%20final.101502.doc. See also Ass’n of Schools of Allied Health Professionals, Definition of Allied Health, at http://www.asahp.org/definition.html (last visited July 8, 2004); Hawkinson 9/25 at 42–44 (describing the education, role, and expertise of physician assistants).
Institute of Medicine (IOM), Allied Health Services: Avoiding Crises 238, 241 (1989), available at http://books.nap.edu/books/0309038960/html/R1.html#pagetop.
See, e.g., In re S.C. Bd. of Dentistry, No. 9311, at 1 (Sept. 12, 2003) (complaint), available at http://www.ftc.gov/os/2003/09/socodentistcomp.pdf.
U.S. Dep’t of Health & Human Services, Telemedicine Report to Congress 21–24 (2001) [hereinafter HHS, TELEMEDICINE (2001)], available at http://telehealth.hrsa.gov/pubs/report 2001/2001REPO.PDF; American Medical Ass’n (AMA), Physician Licensure: An Update of Trends, at http://www.ama-assn.org/ama/pub/category/2378. html#introduction (last updated Sept. 4, 2003).
See IOM, supra note 180, at 235–37; Sue A. Blevins, The Medical Monopoly: Protecting Consumers or Limiting Competition? 7 (Cato Institute, Policy Analysis No. 246, 1995), at http://www.cato.org/pubs/pas/pa-246.html.
Morris M. Kleiner, Occupational Licensing, 14 J. Econ. Persp. 189, 191 (2000). For a discussion of the state action doctrine issues that licensure raises, see infra note 286, and accompanying text, and infra Chapter 8.
SeeBenjamin Shimberg et al., Occupational Licensing: Practices and Policies 14 (1972) (stating that licensing boards “serve as gatekeepers to determine the qualifications and competence of applicants” and ensure “that standards are adhered to by practitioners and, when necessary, adjudicate disputes between the public and members of the regulated occupation.”); arolyn Cox & Susan Foster, Federal Trade Comm’n, The Costs and Benefits of Occupational Regulation 1, 3 (1990); National Council of State Boards of Nursing, Inc., Comments Regarding Hearings on Health Care and Competition Law and Policy (July 31, 2003) (Public Comment) (Submitted by Donna M. Dorsey).
Shimberg et al., supra note 185, at9 (citing U.S. Der’t of Health, Education, & Welfare, Report on Licensure and Related Health Personnel Credentialing (1971)).
Id. See also Nat’l Council of State Boards o f Nursing, Inc., Comments Re: Letter from the National Boards for Certification of Hospice and Palliative Nurses (Jan. 8, 2004) (Public Comment) (Submitted by Donna M. Dorsey).
Cox & Foster, supra note 185, at 43; Blevins, supra note 183, at 7; Kleiner 6/10 at 35.
See American Medical Ass’n, Becoming An M.D., at http://www.ama-assn.org/ama/pub/category/2320.html (last updated Dec. 4, 2003); Bureau of Labor Statistics, U.S. Dep’t of Labor, Physicians and Surgeons, at http://www.bls.gov/oco/ocos074.htm (last modified Feb. 27, 2004).
See Blevins, supra note 183, at 7; Cox & Foster, supra note 185, at 49; Minnesota Office of The Legislative Auditor, Occupational Rrgulation (99–05), at xii (1999), available at http://www.auditor.leg.state.mn.us/ped/pedrep/9905-all.pdf.
Cox & Foster, supra note 185, at 49.
See Kleiner 6/10 at 42; Cox & Foster, supra note 185, at vi (“Mandatory entry requirements and business practice restrictions increase the cost of providing professionals’ services and, as result, increase prices as well.”).
Sherman Folland et al., The Economics of Health Care 343 (2004); see alsoCox & Foster, supra note 185, at 4–16 (discussing rationales for licensure including asymmetric information on quality, externalities, and the dual role of professional as diagnostician and treatment specialist).
Kleiner, supra note 184, at 191.
Cox & Foster, supra note 185, at vii; Kleiner 6/10 at 37–38.
See, e.g., Lawrence Shepard, Licensing Restrictions and the Cost of Dental Care, 4 J.L. & Econ. 185 (1978).
See, e.g., Kleiner 6/10 at 42; Morris M. Kleiner, Occupational Licensing and Health Services: Who Gains and Who Loses? 5–6 (6/10) (slides) (discussing study) [hereinafter Kleiner Presentation], at http://www.ftc.gov/ogc/healthcarehearings/docs/030610kleiner.pdf.
See Kleiner 6/10 at 39–40; Kleiner, supra note 184, at 197.
Kleiner Presentation, supra note 197, at 5–6. 200 Morris M. Kleiner & Robert T. Kudrle, Does Regulation Affect Economic Outcomes? The Case of Dentistry, 43 J.L. & ECON. 547 (2000); see also Sidney L. Carroll & Robert J. Gaston, Occupational Restrictions and the Quality of Service Received: Some Evidence, 47 S. ECON. J. 959 (1981) (finding that licensure of electricians increased the number of electrocutions because consumers responded to the increased prices of licensed electricians by doing repairs themselves); Kleiner 6/10 at 42 (discussing the “Mercedes Benz effect” of licensure, which enables consumers to “get a high quality service... or no service at all because no other services are legally available.”).
See Kleiner Presentation, supra note 197, at 5–6; see also Lomazow 6/10 at 259–60 (“[T]his whole issue of lesser trained versus more trained... simply flies in the face of logic. I mean, and you can talk about studies and studies and studies, but it’s just illogical. You want the best. You want the people that are best trained, the best qualified to do the thing. Do you want a certified plumber or do you want some guy next door to come over?”).
See Stanley J. Gross, Professional Licensure and Quality: The Evidence (Cato Institute, Policy Analysis No. 79, 1986) (citing studies on the effects of professional licensing arrangements on mobility in discussion of “Interstate Mobility”), at http://www.cato.org/pubs/pas/pa079.html; Kleiner, supra note 184, at 198; Kleiner 6/10 at 39, 49 (discussing the role of the Federal government and practitioners in monitoring provider mobility and licensure standards); Gingrich 6/12 at 16–17.
See, e.g., Cox & Foster, supra note 185, at 44–45.
See generally id.
See, e.g., id. at 45; Nat’l Board for Certification of Ho spice & Palliative Nurses, NBCHPN Response to Hearings on Health Care and competition Law and Policy Regarding Advanced Practice Registered Nurse Task Force of the National Council for State Boards of Nursing, Inc. (Sept. 30, 2003) 1–5 (Public Comment).
SeeCox & Foster, supra note 185, at 45 (“[C]ertification may not lessen quality problems associated with externalities (footnote omitted). A consumer who chooses a noncertified doctor, for example, may not take into account the possible effect of his quality decision on others....”).
See Morrisey 6/10 at 254.
AMA, supra note 182; Blevins, supra note 183, at 7 (“Professional health care associations have been influential in setting the standards for licensure laws in the United States.”).
Fed’n of State Medical Boards, Getting a License-The Basics, at http://www.ama-assn.org /ama/pub/category/2644.html (last updated Sept. 29, 2003); Byrd 6/10 at 67.
SeeCox & Foster, supra note 185, at 1 (“Although the professions may seek to benefit consumers, the possibility of a conflict of interest exists. The regulators, in many cases, have a financial interest in the profession they are regulating. Since professionals’ self-interest may not coincide with the public’s best interest, many have come to regard self-regulation with growing skepticism.”); IOM, supra note 180, at 241; Apold 6/10 at 119; Bauer 6/10 at 227; Carolyn Buppert, Comments Regarding Competition Law and Policy & Health Care (Aug. 30, 2002) (Public Comment); American Congress on Electroneuromyography, Comments Regarding Health Care and Competition Law and Policy (July 15, 2003) (Public Comment); Melissa M. English, Comments Re: Anti-Competition Practives (July 22, 2003) (slides) 1–2 (Public Comment).
See Gross, supra note 202 (discussing empirical studies that have found “licensing has had a profoundly negative effect” on the utilization of paraprofessionals); Apold 6/10 at 119. Commentators and panelists also discussed other barriers to entry for AH Ps. See Mallon 6/10 at 187–188; Newman 6/10 at 203—205; Lynne Odell-Holzer, Comments Regarding FTC/DOJ Hearings Regarding Anticompetitive Practices in Healthcare Industry (Public Comment); Joe Holzer, Comments Regarding Hearings on Healthcare Competition Law and Policy (July 10, 2003) (Public Comment); Christine A. Sullivan, Comments Regarding Hearings on Health Care Competition Law and Policy (Sept. 19, 2003) (Public Comment); Cathryn Wright, Comments Regarding Hearings on Health Care Competition Law and Policy (July 22, 2003) (Public Comment); American Ass’n of Nurse Anesthetists, Comments Regarding Hearings on Health Care and Competition Law and Policy (Nov. 20, 2003) (Public Comment) (Submitted by Frank Purcell); American Ass’n of Nurse Anesthetists, New Economic Perspectives on the Market for Anesthesia Services: Achieving Desired Reforms Through Fair Competition, Nov. 2003 (Public Comment) (Presented by Jeffrey C. Bauer); American Chiropractic Ass’n, Comments Regarding Health Care and Competition Law and Policy (Nov. 24, 2003) (Public Comment) (Submitted by Donald J. Krippendorf & George B. McClelland). But see American Medical Ass’n, Health Care and Competition Law and Policy — Quality and Consumer Information: Market Entry (June 10, 2003) (Public Comment); Frank A. Sloan & Roger Feldman, Competition Among Physicians, inCompetition in the Health Care Sector: Past, Present, and Future: Proceedings of a Conference Sponsored by the Bureau of Economics, Federal Trade Commission pt.2, at 57–131 (Warren Greenberg ed., 1978).
See Byrd 6/10 at 67–70, 75.
See id. at 69–70.
Id. at 74.
Id. at 74–75, 135 (stating that “the people that are suffering the most [from restrictions on direct payment] are our elderly and our underprivileged and our school children who don’t have access to offices on Monday through Thursday from eight to five.”).
In re S.C. Bd. of Dentistry, No. 9311, at 1 (Sept. 12, 2003) (complaint), at http://www.ftc.gov/os/2003/09/socodentistcomp.pdf. For discussion of the state action issues this case raises, see infra note 286, and accompanying text, and infra Chapter 8. See generally Loeffler 6/10 at 79.
In re S.C. Bd. of Dentistry, No. 9311, at 8 (Oct. 22, 2003) (memorandum to support motion to dismiss), at http://www.ftc.gov/os/adjpro/d9311 /031021scdentmemoinsupdismiss.pdf.
IOM, supra note 180, at 249 (“Widening the membership of regulatory boards has been one of the most consistent recommendations made by critics of state occupational regulation (e.g., Public Health Service, 1977; Begun, 1981; Cohen, 1980; Shimberg, 1982).”).
Id. at 256.
Id.
U.S. Dep’t of Health & Human Services, Telemedicine Report to Congress § III.B. (1997) (noting that physician-to-physician communication can take varied forms including “the mailing of x-rays, clinical histories and pathological and laboratory specimens for evaluation and interpretation, and oral or written inquiries to another out-of-state physician involved in the patient’s care or in the form of a specific consultative request to a physician with special expertise”) [hereinafter HHS, TELEMEDICINE (1997)], http://www.ntia. doc.gov/reports/telemed; AM A, supra note 182.
See HHS, Telemedicine (1997), supra note 221, § III.B.
See HHS, Telemedicine (1997), supra note 221, § I.A.; see alsoInstitute of Medicine, Telemedicine: Aguide to Assessing Telecommunications in Health Care 16 (1996).
Telemedicine is not subject to the risks of Internet fraud that have led the Commission to bring over 300 law enforcement cases involving auction fraud, investment fraud, “Nigerian scams,” cross-border Internet fraud and identity theft. See generally Prepared Statement on Efforts to Fight Fraud on the Internet: Before the S. Spec. Comm. on Aging, 108th Cong. (Mar. 23, 2004) (Statement of Howard Beales, Director of the Bureau of Consumer Protection, Federal Trade Commission), at http://www.ftc.gov/os/2004/03/bealsfraudtest.pdf; General Accounting Office, Internet Pharmacies: Some Pose Safety Risks for Consumers and Are Unreliable in Their Business Practices (2004), available at http://www.gao.gov/new.items/d04888t.pdf.
See HHS, Telemedicine (1997), supra note 221, § I.A. (“Telemedicine also has the potential to improve the delivery of health care in America by bringing a wider range of services such as radiology, mental health services and dermatology to underserved communities and individuals in both urban and rural areas.”); Waters 10/9 at 639–40; Parente 10/9 at 640–41.
See, e.g., Waters 10/9 at 617; Parente 10/9 at 640–41.
HHS, Telemedicine (1997), supra note 221, § I.A. (“[T]elemedicine can help attract and retain health professionals in rural areas by providing ongoing training and collaboration with other health professionals.”).
HHS, Telemedicine (2001), supra note 182, at 41, 44–45; see also Parente 10/9 at 641; Waters 10/9 at 652–53.
SeeFla. Stat. ch. 456.065 (1) (2004); Gary Winchester, Executive Summary, Prepared for the Federal Trade Commission Office of Policy Planning, Public Workshop: Possible Anticompetitive Efforts to Restrict Competition on the Internet 3 (O ct. 9, 2002), at http://www.ftc.gov/opp/ecommerce /anticompetitive/panel/winchester.pdf; Winchester 10/9 at 624–25, 643–44.
HHS, Telemedicine (1997), supra note 221, § III.C.
See, e.g., Winchester 10/9 at 624–25; Stephen Parente, A Review of the Internet-Enabled Medical Marketplace, Written Statement Prepared for the Federal Trade Commission Office of Policy Planning, Public Workshop: Possible Anticompetitive Efforts to Restrict Competition on the Internet 2 (Oct. 9, 2002), at http://www.ftc.gov /opp/ecommerce/anticompetitive/panel/parente.pdf.
Edward T. Schafer, Telemedicine: An Emerging Technology With Exciting Opportunities for North Dakota, 73 N. Dak. L. Rev. 199, 204 (1997); Roman J. Kupchynsky II & Cheryl S. Camin, Legal Considerations of Telemedicine, 64 TEX. B. J. 20, 27–28 (2000).
Western Governors’ Ass’n, Telemedicine Action Report (1995); Parente 10/9 at 642–43.
AMA, supra note 182; Parente, supra note 231, at 4–5.
HHS, Telemedicine (2001), supra note 182, at 21; see also AMA, supra note 182; Robert J. Waters, Anticompetitive Efforts to Restrict Telehealth Services on the Internet, Written Statement Prepared for the Federal Trade Commission Office of Policy Planning, Public Workshop: Possible Anticompetitive Efforts to Restrict Competition on the Internet 8–15 (Oct. 9, 2002), at http://www.ftc.gov/opp/ecommerce/anticompetitive/panel/waters.pdf.
See AMA, supra note 182; HHS, Telemedicine (2001), supra note 182, at 21; Waters 10/9 at 619–22 (discussing Oregon, Texas and Nevada).
See, e.g., Parente, supra note 231, at 4–5; Parente 10/9 at 619.
See, e.g., Parente 10/9 at 615–616.
See AMA, supra note 182.
ATA Policy Regarding State Medical Licensure: Hearings on Telemedicine Before the Subcomm. on Sci., Tech. & Space, S. Comm. on Commerce, Sci. & Transp., 106th Cong. (1999) (Attachment to Statement of Dr. Ronald K. Poropatich, Member, Board of Directors, American Telemedicine Association), at http://www.senate.gov/~commerce/hearings/0915por2.pdf; see also Waters 10/9 at 618–620.
Peter J. Hammer & William M. Sage, Antitrust, Health Care Quality, and the Courts, 102 Colum. L. Rev. 545, 568 (2002) (noting that 35 percent of health care antitrust disputes involving quality between 1985 and 1999 raised these issues). The Commission has brought enforcement actions involving physician privileging and credentialing issues. See In re Med. Staff of Mem’l Med. Ctr., 110 F.T.C. 541 (1988) (consent order) (alleging the medical staff of a hospital in Savanna, Georgia, acting through its credentials committee, conspired to suppress competition by denying a certified nursemidwife’s application for hospital privileges without a reasonable basis); In re Eugene M. Addison, M.D., 111 F.T.C. 33 9 (1988) (consent order).
For a description of physician peer review processes, see Hammer & Sage, supra note 241, at 619. See generally Meghrigian 9/24 at 83–84. See also American College o f Nurse-Midwives, Addendum of Cases and Articles For Statement of Lynne Loeffler for the American College of Nurse-Midwives (Public Comment).
Sage et al., Why Competition Law Matters To Health Care Quality, 22 Health Affairs 31, 37 (Mar./Apr. 2003).
Hammer & Sage, supra note 241, at 575. The authors note that these figures raise questions about the extent to which private counsel inform clients of their dismal prospects before pursuing such cases. See id. at 601.
Sage et al., supra note 243, at 37.
42 U.S.C. S. § 11151 (1986).
Hammer & Sage, supra note 241, at 569, 597, 619. Although the number of cases dropped after this legislation’s passage, the success rate for plaintiffs did not change. Id.
See, e.g., Thomas L. Greaney, A Perfect Storm on the Sea of Doubt: Physicians, Professionalism and Antitrust, 14 Loy. Consumer L. Rev. 481 (2002).
In re Polygram Holding, Inc., 5 Trade Reg. Rep. (CCH) ¶ 15,453 at 22,456 (FTC 2003), available at http:www.ftc.gov/os/2003/07/poly gramopinion.pdf.
Health Care Statements, supra note 44, § 8(B)(1).
Some panelists stated the Agencies may increasingly confront physician network joint ventures that require rule of reason analysis. See Wiegand 9/24 at 4–5; Guerin-Calvert 9/24 at 26; Feller 9 /24 at 73.
Health Care Statements, supra note 44, § 8.
Id. § 8(A)(4).
See, e.g., Asner 9/25 at 36; see also supra note 36.
Health Care Statements, supra note 44, § 8(B)(1).
Letter from Jeffrey W. Brennan, Federal Trade Commission, to John J. Miles, Ober, Kaler, Grimes & Shriver (Feb. 19, 2002) (FTC Staff advisory opinion regarding MedSouth, Inc.) [hereinafter FTC MedSouth Letter], at http://www.ftc.gov/bc/adops/medsouth.htm. See generally Thomas B. Leary, The Antitrust Implications of “Clinical Integration:” An Analysis of FTC Staff’s Advisory Opinion to MedSouth, 47 St. Louis L.J. 223 (2003); Thomas B. Leary, The Antitrust Implications of “Clinical Integration:” An Analysis of FTC Staff’s Advisory Opinion to MedSouth, Speech Before Saint Louis University Health Law Symposium (Apr. 12, 2002), at http://www.ftc.gov/speeches/leary/eicreview.pdf.
Timothy J. Muris, Everything Old is New Again: Health Care and Competition in the 21st Century, Prepared Remarks for the 7th Annual Competition in Health Care Forum (Nov. 7, 2002), at http://www.ftc.gov/speeches/muris/murishealthcarespeech0211.pdf.
See California Ass’n of Physician Groups, Clarifying the Health Care Statements’ Policies of Clinical Integration and Ancillarity 7–9 (Public Comment) [hereinafter CAPG (public cmt)]; Robert F. Liebenluft & T racy E. Weir, Clinical Integration: Assessing the Antitrust Issues, inHealth Law Handbook (forthcoming 2004 ed.) (manuscript at 29–35, on file with the authors). For a discussion of private antitrust litigation involving physician credentialing, see supra notes 241–247, and accompanying text.
See, e.g., Bartley Asner, An IPA Based Model for Clinical Integration in a PPO Setting, in CAPG (public cmt), supra note 258, at i (discussing a system of payment from an insurance company to a PPO, which would enable the PPO to track claims and gather additional data).
See, e.g., Shortell et al., supra note 84, at 159.
FTC MedSouth Letter, supra note 256.
See, e.g., Robert H. Miller & Ida Sim, Physicians’ Use of Electronic Medical Records: Barriers and Solutions, 23 Health Affairs 116, 116 (Mar./Apr. 2004) (stating that electronic medical records have “the most wide-ranging capabilities and thus the greatest potential for improving quality.”); Stephen M. Shortell et al., Remaking Healthcare in America: Building Organized Delivery Systems 40–41 (1996) (“It is not possible to create clinically integrated care... without certain functions such as information systems and quality management in places.”).
Teresa Mikenas Jacobsen & Maria Hill, Achieving Information Systems Support for Clinical Integration, in Clinical Integration: Strategies and Practices for Organized Delivery Systems 129, 129 (Mary Crabtree Tonges ed., 1998).
Miller & Sim, supra note 262, at 119 (“In most practices we studied, up-front costs [for electronic medical records] ranged from $16,000 to $36,000 per physician. Some practices incurred additional costs (in the form of decreased revenue) from seeing fewer patients during the EMR transition period.”); Liebenluft & Weir, supra note 258 (manuscript at 32).
Gillies et al., supra note 14, at 494–96.
See, e.g., CAPG (public cmt), supra note 258, at 5; Liebenluft & Weir, supra note 258 (manuscript at 29–30); Brown, supra note 12, at 28 9. See generally ABA (public cmt), supra note 21, at 19–22.
CAPG (public cmt), supra note 258, at 5.
See id. at 5.
FTC MedSouth Letter, supra note 256.
See Liebenluft & Weir, supra note 258 (manuscript at 16–17).
See Peter R. Kongstvedt, Physician Behavior Change in Managed Health Care, inEessentials Of Mananged Health Care, supra note 12, at 425 (“Physicians, like all of us, have habits and patterns in their lives. Habits also extend to clinical practices that are not cost-effective but that are difficult to change.“); Liebenluft & Weir, supra note 258 (manuscript at 30–31, 33–34); FTC MedSouth Letter, supra note 256 (proposing several steps to ensure compliance with CMPs). See also CAPG (public cmt), supra note 258, at 5–6 (networks must review their “physicians’ delivery of care to ensure compliance with efficiency and quality goals identified in clinical protocols“); Brian J. Anderson, Values and Value: Perspectives on Clinical Integration, inClinical Integration, supra note 263, at 39, 54 (stating that “an integrated system must be able to apply performance measures across the span of care and service sites.“); Susan A. Creighton, Diagnosing Physician-Hospital Organizations, Remarks Before American Health Lawyers Association Program on Legal Issues Affecting Academic Medical Centers and Other Teaching Institutions 2 (Jan. 22, 2004), at http://www.ftc.gov/speeches/other/creightonphospeech.htm.
Health Care Statements, supra note 44, § 8(B)(1).
CAPG (public cmt), supra note 258, at 8.
Id. at 9.
Id. at 10. See also Liebenluft & Weir, supra note 258 (manuscript at 39) (explaining that a physician network that has implemented a clinical integration program “can sell a’ new product’ — that is, an integrated package consisting of more than merely the individual physician services, but, rather, an integrated package of those services tied to the network’s clinical program.“).
Liebenluft & Weir, supra note 258 (manuscript at 39).
Id. (manuscript at 39).
Id. (manuscript at 39).
See, e.g., Leary, supra note 256, at 16–17 (discussing the relationship between joint contracting and non-exclusivity).
See, e.g., Liebenluft & Weir, supra note 258 (manuscript at 15).
See Holloway 9/25 at 27 (stating that it “is desirable for the FTC to issue definitive and clear guidelines as to what level of clinical integration and oversight is required”); Asner 9/25 at 85 (remarking that “[w]e’re looking for somewhat of a road map. It can be very broad, but not as broad as exists in the current guidelines. It doesn’t have to be specific, a list of things that you have to do. T here is something in between.”); Section of Antitrust Law, American Bar Ass’n, Comments on the Public Hearings on Health Care and Competition Law and Policy 15–17 (Public Comment); American College of Surgeons, Comments Regarding the Federal Trade Commission (FTC) Workshop on Health Care Competition Law and Policy (Sept. 30, 2003) 3–4 (Public Comment) (Submitted by Thomas R. Russell). See generally ABA (public cmt), supra note 21, at 25–26.
Health Care Statements, supra note 44, § 6.
Id. § 6.
See Letter from Charles A. James, Department of Justice, to Jerry B. Edmonds, Williams, Kastner & Gibbs PLLC (Sept. 23, 2002), at http://www.usdoj.gov/atr/public/busreview/200260.pdf; Letter from Jeffrey W. Brennan, Federal Trade Commission, to Gerald Niederman, Faegre & Benson (Nov. 3, 2003), at http://www.ftc.gov/bc/adops/mgma031104.pdf; Letter from Jeffrey W. Brennan, Federal Trade Commission, to Gregory G. Binford, Benesch Friedlander Coplan & Aronoff LLP (Feb. 6, 2003), at http://www.ftc.gov/bc/adops/030206dayton.htm; American Medical Ass’n, Physician Information Sharing 1 (Public Comment).
See XIII PHILLIP E. AREEDA & HERBERT HOVENCAMP, ANTITRUST LAW: An Analysis of Antitrust Principles and Their Application 2111d1, at 49 (2nd ed. 2004).
See supra Chapter 1.
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(2005). Industry Snapshot and Competition Law: Physicians. In: Hyman, D. (eds) Improving Healthcare. Developments in Health Economics and Public Policy, vol 9. Springer, Boston, MA. https://doi.org/10.1007/0-387-25752-7_3
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