ObamaCare vs. the Antitrust Law
Executives from the ProMedica Health System of Toledo and St. Luke’s Hospital in Maumee, a suburb, say their merger, which was consummated last August, will allow them to collaborate and provide care that is “more efficient and cost-effective” — an overarching goal of the new health care law espoused in scores of speeches by President Obama and administration officials.
The trial here, before the chief administrative law judge of the Federal Trade Commission, has implications far beyond Toledo. It illustrates the risks that arise when competing health care providers try to collaborate, as they are racing to do all over the country, in part because of incentives built into the new health law.
Federal officials are seeing a wave of mergers, consolidations and joint ventures in the health care industry. More and more hospitals are buying up medical practices that competed with one another. Groups of doctors, with the same or different specialties, are merging their practices.
Obama doesn’t believe in competition.
It’s the Wal Mart model. Become large enough to underprice the competition.
It seems like there is a real possibility here in the long term – assuming that there would enough of these mergers – for the new larger entities to inflate prices. If I’m not mistaken, that’s typically what happens with oligopolies and such.
ACO status might be a convenient way for hospitals to merge without too much complaint from the government. This will create monopoly status in the one industry that would be better suited by increasing competition.
If (and when) the ACO model doesn’t work, it’s likely that the mergers will still remain. Government has provided an excuse for monopolistic consolidation.