Psychology Psychology of Success

The Antitrust Undoing of a Medical Group Acquisition

September 4, 2014

Earlier this year, a federal trial court in Idaho struck down, and ordered unwound, a hospital’s acquisition of a medical group on grounds that it violated antitrust law. The case is now on appeal. Sixteen states, through their attorneys general, have filed appellate briefs in support of the Federal Trade Commission which brought the action to unwind the acquisition.

The hospital and the acquired group contend that the merger is justified by (1) the need to clinically integrate in order to improve quality, (2) the Affordable Care Act’s provisions encouraging clinical integration, and (3) the not-for-profit status of many of the hospital systems carrying out charity care.

The states arguing along with the FTC cite the incredible increase in the cost of healthcare that results due to “physician alignment.” (The states’ brief cites a retrospective study of another merger that led to a 23-50% price increase.)

What will eventually result in the case on appeal is yet to be seen. Whether and how it will spill over into the world of private physician group alignment, that is, of roll ups within both office-based and hospital-based medical specialties, is, too, up in the air.

Better care for less money. Yes, there’s a free lunch and someone I know swears that Santa Claus lives down the street from his cousin’s best friend.

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