FTC Begins ‘Crackdown’ on Doctors, Hospitals Accused of Price-Fixing
The Federal Trade Commission has "launched a crackdown" on doctors and hospitals that join together to set prices in an attempt to counter managed care organizations' bargaining power, the Wall Street Journal's Alan Murray reports in his "Political Capital" column. A settlement earlier this month between the FTC and a group of Napa County obstetricians and gynecologists accused of price fixing is the first of several "similar but larger cases" that will be made public in the next few weeks, according to government officials. The settlements will prohibit doctors from joining together to set prices and will likely allow HMOs to renegotiate lower fees with individual doctors. Doctors, hospitals and other health providers joined together in the late 1990s to "fight back" against what they saw as managed care's low reimbursements, and while recently they "seem to have gained the upper hand" against HMOs, Murray writes that the federal government is now asking, "In banding together, did those health care providers violate antitrust laws?" FTC Chair Timothy Muris said, "There clearly needed to be consolidation in the health care industry. But now, in certain areas, it has gone too far." Murray writes that antitrust cases against doctors and hospitals are "notoriously difficult," partly because they involve local rather than national markets. However, Muris "appears undaunted," claiming there are "many markets" in which one or two hospitals "clearly dominate" or doctors have become "quite bold in fixing prices." Muris said, "This is something we are going to be paying a lot of attention to" (Murray, Wall Street Journal, 4/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.