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June 25, 1999 |
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Health Collective Bargaining Called Bad Idea The leading antitrust enforcers told Congress that giving health professionals a broad antitrust exemption "would be bad medicine for consumers." • The chairman of the Federal Trade Commission, Robert Pitofsky, testified at a hearing Tuesday of the House Judiciary Committee that "[t]he bill's stated purpose is to promote the quality of patient care. Collective bargaining by health care professionals, however, does not ensure better care for patients." • In opposing the Quality Health Care Coalition Act, H.R. 1304, Chairman Pitofsky testified, "Rather, our opposition is based on the commission's experience investigating the impact on consumers of numerous instances of collective bargaining by independent health care practitioners." • The head of the Department of Justice's antitrust division, Assistant Attorney General Joel Klein, agreed with Mr. Pitofsky that weakening the antitrust laws, which protect consumers by ensuring vigorous competition, by granting health providers a broad exemption is the wrong way to try to settle contract disputes between providers and health insurers. Cartels, collusion, boycotts and price fixing are not in the public's best interest. • Texas businessman Bill Jones, president of Materials Transportation Co. of Temple, warned that H.R. 1304 would jeopardize consumers. "It would certainly make my life easier if I could collude with my competitors to resist the pressure that large buyers put on me to cut costs and improve efficiency. But I know such an easy fix would not be good for my business or the economy, and so I continue to strive to become a better, sharper competitor every day." • Such anticompetitive behavior, if legalized for health care providers, would concentrate market power and lead to higher prices for consumers and higher costs for employers. It would also diminish competition and reduce consumer choice, especially of nonphysician providers. A new study puts the increased costs attributable to H.R. 1304 at up to $80 billion, with hefty insurance premium hikes as high as 11 percent. The result: millions more uninsured Americans. • Charles River Associates estimates that the Quality Health Care Coalition Act would result in a 3.1 percent to 7.1 percent increase in health care spending, or between $34.5 billion to $80 billion annually. • The rise in private health insurance premiums are estimated at 5.8 percent to 11 percent, or $21.7 billion to $41.1 billion yearly. • Every one percent rise in premiums results in 200,000 to 400,000 people losing their health coverage. H.R. 1304 would therefore cause an additional 1 million to 4 million Americans to become uninsured. Granting such a broad antitrust exemption would do nothing for patients. • The legislation would allow independent health care providers to bargain collectively with health plans and insurers by receiving the same antitrust treatment as labor unions or other legitimate bargaining units. However, they would not have to unionize or form joint ventures. • The bill would indeed legalize the formation of provider cartels. Cartels restrict competition and fix prices.
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