| OCR Text |
Show ability and willingness of third-party purchasers to switch between different health care providers or networks in response to price increases, and the factors that determine the willingness of third-party purchasers to make such changes. A key concern in analyzing the vertical aspects of a network is the extent to which the network's arrangements with its provider members will foreclose competition by impeding the formation and operation of competing networks. As in the statement on physician network joint ventures, a preference is expressed in this statement for non-exclusive agreements, as they are less likely to impede or preclude competition among networks and among individual providers. The same indicia of non-exclusivity noted in the statement on physician network joint ventures are enumerated in this statement. The formation of a network often means selection among potential providers for inclusion in the network. Therefore, some providers may be excluded, while others are admitted to a network. Analysis of the impact of exclusion may be important. Interest is not in whether a particular provider has been harmed by exclusion from the network, but rather by whether the exclusion reduces competition among providers in the market and thereby harms consumers. Thus, if excluded providers are unable to compete effectively without access to the network, competition (and consumers) may be harmed. The agencies recognize a number of efficiencies that may potentially result from the formation and operation of a multiprovider network. The most important are cost savings associated with the assumption of financial risk by the participants in the network. Other possible efficiencies include reduced administrative costs, improved utilization review, improved case management, quality assurance, and economies of scale. The agencies feel that the greater the competition facing the network, the more likely the network will actually realize potential efficiencies that would benefit consumers. The statement concludes by describing the information the agencies will use in their rule of reason analyses of multiprovider networks. Information supplied by the participants in the network, purchasers, providers, and consumers may be included. Interviews with individuals familiar with the market in question, such as purchasers of health care services, competitors of the providers in the network, and employers who offer health benefits, may also be a source of information. Agencies rely on interviews as a means of learning what factors determine the competitive dynamics in the particular community where the network is forming. A question often asked is whether the benefits of the network could be realized in an alternative, but less anticompetitive, manner. Conclusion Readers are encouraged to study the nine statements issued in 1994 as they include many scenarios and helpful examples of ways in which agreements and activities can be structured to avoid or minimize antitrust problems. References U.S. Department of Justice and Federal Trade Commission. (1993). Statement of Antitrust Enforcement Policy in the Health Care Area. Sept. 15, 4 Trade Reg. Rep. (CCH) P 13,151 at 20,755-68. U.S. Department of Justice and Federal Trade Commission. (1994). Statement of Enforcement Policy and Analytical Principles Relating to Health Care and Antitrust. Sept. 27, 4 Trade Reg. Rep. (CCH) P 13,152 at 20,769. About the Authors Debra L. Scammon is George Eccles Faculty Scholar, Professor of Marketing, Associate Dean for Academic Programs and TeachingI Educational Resources in the David Eccles School of Business, University of Utah. Dan A. Fuller is the Dee Smith Research Scholar, Department of Economics, Weber State University. Correspondence should be sent to Dr. Scammon, David Eccles School of Business, University of Utah, telephone (801) 581-4754. Health Care and Antitrust Enforcement |
