FTC Opens Anti Trust on Healthcare Mergers

Fierce Healthcare has;
Anti-Trust Agencies Target Hospitals To Promote Competition

FTC challenged 17 of the 1,450 mergers reported in 2011

June 15, 2012 | By Alicia Caramenico

Aiming to preserve competition among healthcare providers and protect patients, the Federal Trade Commission challenged 17 of the 1,450 merger transactions reported in fiscal year 2011, with two involving hospitals. The healthcare targets were ProMedica and St. Luke's Hospital in Ohio and Phoebe Putney Health System and HCA-owned Palmyra Park Hospital in Albany, Ga., according to an annual report from the FTC and the U.S. Justice Department's Antitrust Division.


"These challenges … are part of the Commission's broader effort to promote competition in the healthcare sector, which benefits U.S. consumers with products and services that are lower cost and high quality," the report states.


The FTC scored a win last year when an administrative judge ruled that a partnership between ProMedica and St. Luke's Hospital was anticompetitive. This past March, the FTC said the health system must give up St. Luke's Hospital within six months. ProMedica plans to appeal to a federal court.



That anti-trust challenge follows the ongoing battle between the commission and Phoebe Putney and Palmyra Medical Center. Although a district court judge last year ruled in favor of the deal to move forward, the FTC recently called on the U.S. Supreme Court to review the hospital merger.


Worried that some mergers would stifle competition and hike up prices, the commission filed a complaint last year to halt an acquisition deal between Illinois health systems, OSF HealthCare and Rockford Health System. In April, the systems decided to call off the merger instead of enduring a lengthy and costly legal battle with the FTC.


However, the commission allowed Sanford Health in Fargo N.D., and Sioux Falls, S.D., to affiliate with North Dakota's Medcenter One health system, both organizations announced last month. The health systems noted that regulatory filings with the FTC and the North Dakota Attorney General's Office are going forward.
To learn more:

- read the FTC report (.pdf)
- here's the Medcenter statement (.pdf)
Related Articles:
Bigger hospitals, mergers drive higher prices
State calls for curbing high hospital prices with anti-trust laws
With ACOs, there's a thin line between collaboration and monopoly 
FTC targets hospital mergers


Thank You Fierce Healthcare and Ms Caramenico




And for those of you following our series on the San Francisco treat, http://psychroaches.blogspot.com/2012/06/mental-health-in-san-francisco.html while this next piece was written in 2004, and developments in Anti Trust are ongoing, it should serve as an appetizer.


Pepper Hamilton LLC has:
An Introduction To Anti Trust Exemptions And Immunities

State Action Immunity
The Supreme Court has held that, in keeping with principles of federalism, the federal antitrust laws do not reach actions of the sovereign states. When the government of a state acts, either through its legislature, judiciary, or executive, its actions are automatically exempted from antitrust liability.¹ For example, the U.S. Supreme Court held that the Arizona Supreme Court’s establishment of standards for admission to the practice of law was exempt from federal antitrust challenges.²


The state government’s immunity is quite broad. The immunity is not affected by whether the state action in question was illegal or the result of bribery.³ Nor will the state’s immunity be defeated because the state officials have conspired with private parties.⁴ With the “possible” exception of rare instances where the state is not acting in a regulatory capacity but as an actual participant in the market, “any action that qualifies as state action is ‘ipso facto . . . exempt from the operation of the antitrust laws.’”⁵


While actions taken directly by state governments are clearly exempt from antitrust scrutiny, “[c]loser analysis is required when the activity at issue is not directly that [of the state], but is carried out by others pursuant to state authorization.”⁶ The U.S. Supreme Court set forth different guidelines for exempting actions taken by municipal governments and by private actors under state authority. These materials will discuss them in turn.


Unlike state conduct, municipal government action is not automatically exempt from antitrust liability.⁷ 


As the U.S. Supreme Court explained:


These decisions require rejection of petitioners’ proposition that their status as such automatically affords governmental entities the “state action” exemption. [The] limitation of the exemption . . . to “official action directed by the state,” arises from the basis for the “state action” doctrine – that given our “dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority,” a congressional purpose to subject to antitrust control the States’ acts of government will not lightly be inferred. To extend that doctrine to municipalities would be inconsistent with that limitation. Cities are not themselves sovereign; they do not receive all the federal deference of the States that create them. . . . In light of the serious economic dislocation which could result if cities were free to place their own parochial interests above the Nation’s economic goals reflected in the antitrust laws, we are especially unwilling to presume that Congress intended to exclude anticompetitive municipal action from their reach.<sup>8


Thank You Mr Bassman and Ms Sicalides</sup>


http://en.wikipedia.org/wiki/Johnson_and_Johnson

"The corporation includes some 250 subsidiary companies with operations in over 57 countries and products sold in over 175 countries"

250 subsidiaries in 57 countries. Anti Trust, ..... ?