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June 18, 1999 |
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Antitrust Bill Would Drive Up Health Costs A health care-related antitrust bill would cause health care costs to rise and send health insurance premiums soaring, a new study has found. • Charles River Associates estimates that H.R. 1304, the Quality Health Care Coalition Act, would result in a 3.1 percent to 7.1 percent increase in health care spending. That equals $34.5 billion to $80 billion more in health care costs annually. • The study places the rise in private health insurance premiums at 5.8 percent to 11 percent, or between $21.7 billion and $41.1 billion yearly. • Because every one percent rise in premiums results in 200,000 to 400,000 people losing their health coverage, H.R. 1304, sponsored by Rep. Tom Campbell, R-Calif., would add about 1 million to 4 million Americans to the rolls of the uninsured. This analysis confirms that granting such a broad antitrust exemption would harm patients. • The legislation would allow independent health care providers to bargain collectively with health plans and insurers, receiving the same antitrust treatment as labor unions or other legitimate bargaining units, but without having to unionize or form joint ventures. • Not only would such an exemption drive up health care costs and reduce access, as the Charles River Associates study determined, it also would inhibit competition, reduce consumer choice of health care providers and decrease quality. Allowing cartels to form legally would do nothing to increase the quality of health care. • The Campbell bill would merely legalize the formation of provider cartels. Cartels restrict competition, not increase it. • Competition, which the antitrust laws are designed to promote, protects consumers – by containing costs, expanding consumer choice, and fostering innovation and quality improvement. • Yet, H.R. 1304 would subject patients and consumers to the consequences of anticompetitive behavior. Provider cartels could drive competing types of providers out of the market, could collude and price fix, and could enforce their anticompetitive behavior by boycotting health plans and insurers. • With diminished competition, provider cartels would have less incentive to innovate – to come up with new and better ways of providing treatment and delivering care. Innovation is the key to quality improvement. Without vigorous competition, quality wanes over time.
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