Perspectives: Antitrust Policy And Real Health Care Reform

Abstract

Hospital leaders agree with Sen. Howard Metzenbaum on one thing: Health care reform is long overdue. But the senator’s notions about reform seem to be based on the outmoded competitive models of the past. Antitrust law reflects the legislative judgment that competition will produce not only lower prices but also better goods and services. But any observer of the health care scene in the 1980s knows differently. To the contrary: We have competition to thank for the medical arms race, with a magnetic resonance imaging (MRI) device on every corner, and for the most rapid escalation in health care costs this nation has ever seen. Although competition may tend to keep prices low and quality high if you’re selling persimmons or personal computers, the rules are somewhat different when you’re trying to save lives and keep people healthy. There is a better way to gain control over health care costs while providing access to care for all Americans and keeping quality high: collaboration. We need to give hospitals, doctors, and other providers incentives to work together more closely than ever for the good of their communities. And that means adapting antitrust policy to allow providers to eliminate excess capacity as well as wasteful and costly duplication of equipment and services. Collaboration does not have to raise prices. More likely, the opposite will be true. In December 1992 an administrative law judge dismissed a suit by the Federal Trade Commission (FTC) against the merger of