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Show merger between general acute-care hospitals falls within the antitrust safety zone if one of the hospitals averages less than 100 licensed beds and has a daily average occupancy of less than 40 inpatients. Both averages extend over the past three years of operation. The safety zone is only applicable if the small, low-occupancy hospital is five years old or older. Hospital Joint Ventures Involving Expensive Equipment: A joint venture whose primary purpose is to facilitate access to high technology equipment by several hospitals through a sharing agreement may fall within a safety zone if structured appropriately. If the joint venture includes only the number of hospitals whose participation is needed to support the equipment, it is sheltered under the guidelines. Additional hospitals may join if they could not support the equipment on their own or through the formation of a competing joint venture. This guideline highlights the antitrust authorities' concern over the ability of "excluded" hospitals to compete in the face of a collaborative agreement among some of its competitors. Importantly, it is the first of the guidelines that specifically grants shelter to collaborative agreements that are forged as a way to enhance the efficiency of participating hospitals. Physician's Provision of Information to Purchasers of Health Care: The enforcement guidelines recognize the importance of information to the efficient operation of the marketplace. To facilitate the sharing of vital information, the collective provision of underlying medical data that may improve purchasers' resolution of issues relating to the mode, quality, or efficiency of treatment falls within the antitrust safety zone. This includes physicians' development of suggested practice parameters which may provide useful information to patients, providers, and purchasers. Such practice guidelines generally are formulated after careful consideration of the costs and benefits of alternative treatments, and suggest the most cost effective procedures be employed. This guideline appears to be focused on exempting from antitrust scrutiny actions contemplated as a means of both cost containment and quality assurance. It may thus be another indication that economic efficiency is a goal of antitrust enforcement on a par with consumer welfare. Hospital Participation in Exchanges of Price and Cost Information: In order for health plan purchasers and consumers to have accurate information on costs and prices of services, the collection of such information is seen as desirable. Thus, hospital participation in written surveys of prices for hospital services, wages, salaries or benefits of hospital personnel fall within the antitrust safety zone if (1) the survey is managed by a third party, (2) the information provided by the survey is based on data more than three months old, and (3) there are at least five hospitals participating. Additionally, the information should be presented such that it is not possible to identify individual data, and each hospital's data represent no more than 25 percent on a weighted basis. Here concern appears to be on the potential impact of information exchange on the price of services as well as the possibility of using individual information to police member compliance in the case of a cartel agreement. Antitrust officials are also concerned that buyers, as well as sellers, have access to the information collected. This guideline appears to be compatible with an enforcement emphasis on consumer welfare. Joint Purchasing Arrangements: Because of the potential cost saving to be gained through joint purchasing arrangements, such arrangements will be allowed in most circumstances. If the joint purchasing arrangement (1) accounts for less than 35 percent of the total sales of the purchased product or service in the relevant market and (2) the cost of products and services purchased jointly accounts for less than 20 percent of the total revenues from all products or services sold by each competing participant in the joint purchasing arrangement, then the joint purchasing arrangement falls within the antitrust safety zone. This safety zone appears to shelter joint agreements whose purpose is the achievement of cost reduction through the creation of some market power by buyers (hospitals, physicians, etc.). Of course, the presumption may be that any cost savings are passed on to the consumer. Physician Network Joint Ventures: Acknowledging the trend in the health care industry for providers to join preferred provider networks and to otherwise participate in provider groups to serve patients, the new guidelines grant antitrust exemptions for such networks so long as they do not result in monopolies. Physician network joint ventures comprised of 20 percent or fewer of the physicians in each physician specialty with staff privileges at a hospital in the relevant geographic market and whose members share substantial financial risk fall within the safety zone. Financial risks are assumed to be shared by members of a physician network joint venture (1) when there is an agreement to provide services to a health insurance plan at a capitated rate, or (2) Utah's Health: An Annual Review 1994 107 |
