FTC Testifies on Competition in Group Health Care

The Federal Trade Commission today told the Senate Judiciary Committee that the agency protects health care consumers from anti-competitive conduct by enforcing antitrust laws, and that the FTC is committed to working with physicians and other providers to give them guidance to avoid antitrust pitfalls as they respond to market challenges.
“The agency will bring enforcement actions where necessary to stop activities that harm consumers by unreasonably restricting competition,” David P. Wales, Deputy Director of the FTC's Bureau of Competition, told the Committee.

“For the past 25 years,” the testimony noted, “the Commission has challenged naked price fixing agreements and coercive boycotts by physicians in their dealing with health plans. These arrangements largely consist of otherwise competing physicians jointly setting their prices and collectively agreeing to withhold their services if health care payers do not meet their fee demands. Such conduct is considered unlawful because it harms competition and consumers, raising prices for health care services and health care insurance coverage, and reducing consumers' choices.”

“It is important to consider what can happen when health plans are forced to accept the collective demands of health care providers for higher fees that are not reasonably necessary to achieving significant efficiencies. The effect is not simply on the health plans that must pay more. Experience with antitrust enforcement over the years shows that the effects can extend to various parties, and in various ways, throughout the health care system, including: