Health care costs in the United States are much higher than in other countries. These cost differences can be explained in part by a lack of competition in the United States. Some markets, such as pharmaceuticals and medical equipment, have elements of monopoly. Other markets, such as health insurance, have elements of monopsony. Many other markets may be subject to collusion on prices, such as generic drugs, or wages, such as the nurse labor market. Lawful monopoly and monopsony are beyond the reach of antitrust laws, but collusion is not. When appropriate, vigorous antitrust enforcement challenging anticompetitive conduct can aid in reducing health care costs. This book addresses monopoly, monopsony, cartels of sellers and buyers, horizontal and vertical merger policy, and antitrust enforcement through private suits as well as the efforts of the antitrust Agencies. The authors demonstrate how enforcing antitrust laws can ultimately promote competition and reduce health care costs.

As millions of Americans are aware, health care costs continue to increase rapidly. Much of this increase in health care costs is due to the development of new life-sustaining drugs and procedures, but part of it is due to the increased monopoly power of physicians, insurance companies, and hospitals, as the health care sector undergoes reorganization and consolidation. There are two tools to limit the growth of monopoly power: government regulation and antitrust policy. In this timely book, Deborah Haas-Wilson argues that enforcement of the antitrust laws is the tool of choice in most cases. Focusing on the economic concepts necessary to the enforcement of the antitrust laws in health care markets, Haas-Wilson provides a useful roadmap for guiding the future of these markets.

Antitrust laws touch upon a wide range of conduct and business relationships in the delivery of health care services, and the issues that should be of concern to health care organizations are described. Health Care Antitrust provides practical overviews of the principal legal issues relating to health care antitrust, as well as a general understanding of antitrust analysis as applied to contractual relationships and business strategies that present antitrust risks in a managed care environment.

The U.S. health care system is organized around markets. There has, however, been ongoing concern about the functioning of these markets, so much so that some have despaired of these markets working at all. The policy response to this concern has been disjointed. Health care markets are subject to many regulations and interventions. Some of these policies have attempted to substitute regulation for competition, regulating entry and investment (certificate of need laws, health planning) or price (all-payer regulation). At the same time, health care markets have been subject to antitrust enforcement. Recent years have seen a shift away from regulatory policies and toward competition. Antitrust policy towards health care markets has become much more vigorous since the early 1970s. Antitrust is intended to ensure the efficient functioning of these markets. As a consequence, competition and antitrust policy have become prominent issues in health policy. Economic research is vital to addressing issues in competition and antitrust in health care. This includes issues of market definition and detecting anticompetitive conduct. In rule of reason cases, where benefits are weighed against costs, it includes measuring the loss of welfare resulting from a particular practice against any gains resulting from it. In this chapter we consider research issues in the analysis of competition and the application of antitrust to health care markets. We outline our views on the analytical issues and review the relevant literatures both from health economics and industrial organization and antitrust generally. Our focus is mainly on hospitals and interactions between hospitals and insurers. This is due, in part, to where there has been antitrust activity. Physician markets are for the most part very unconcentrated, and as such they do not lend themselves to the kinds of anticompetitive conduct the antitrust laws prohibit. Although issues of competition and antitrust in pharmaceutical markets are fascinating and important, they differ in some fundamental ways from markets for health care services, and as such, we exclude them from this chapter. In what follows we first discuss the optimality of antitrust in health care markets, then horizontal issues in health care markets. This is followed by a discussion of vertical issues, and finally, by a conclusion and a set of recommendations for future research.

The most complete and up-to-date single-volume reference on health care antitrust law.

Provides an economic assessment of the impact of competition on quality in health care markets. This book offers performance standards for competition; findings from economic theory; and, empirical evidence on health care competition and quality.