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PubMed1992

Managing competition in the health care industry.

Health-care decisions made by consumers are generally not made by informed choice. Hospitals, expanding their market beyond physician referrals, are discovering that consumers are interested in taking a more active role. Managed-competition programs may be one of the first concepts to fine-tune a new broad-based health-care system.

Commerce↗
PubMed1993

Survival of the fittest. The 'competition' model for health care.

The following are excerpts from an article first published in the Health/PAC Bulletin in 1981. This lengthy analysis was written in response to various proposals made during the late 1970s and early 1980s to unfetter the invisible hand of free-market competition in order to solve the nation's health care "crisis." Twelve years later...the health care "crisis" is considerably more grave, and it has become even more popular to wave the "invisible" hand in the hope it will go away. Twelve years later, the objections Sigelman raises have not gone away either, and his conclusions--that in the face of the competition model, the need is greater than ever for consumers to organize to compel providers to deliver services that respond to the needs of the community--is, unfortunately, prophetic.

Competitive Medical Plans↗
PubMed1996

The legal framework for effective competition.

Largely because of its indifference to spiraling costs, the professional domination model is being replaced by a market model based on competition among managed care plans and integrated delivery systems. In general, the more fully integrated previously competing providers become--for instance, by assuming financial risk together--the less legal risk is present, because of a decreased possibility of improper conspiratorial or collective behavior. Nevertheless, provider joint ventures and integrated delivery systems face a complex interaction of practical challenges and various legal and regulatory risks. This chapter explores ways in which laws involving fraud and abuse, self-referral, private inurement, corporate practice of medicine, Medicare reimbursement policy, and antitrust enforcement affect typical integrated delivery systems. From a legal standpoint, it might seem logical that the laws regulating health care providers would support and promote integration. A permissive legal environment to foster development of an integrated service network model assumes its development in a delivery system in which networks are at financial risk for the services provided. However, many of the laws and regulations governing integrated provider development were established at a time when joint ventures and other alliances were organizing in a predominantly fee-for-service environment and were generating significant increases in health care costs without producing demonstrable efficiencies or quality enhancements. The results is a fundamental inconsistency in government policy. The demand for collaboration by purchasers and legislatures does not necessarily cause the vast body of health care regulators to revise their concerns that many of the very collaborative activities being encouraged trigger potentially illegal acts and relationships. In a market model, the application of federal and state antitrust laws is especially important. In 1993 and 1994, the Department of Justice and the Federal Trade Commission jointly issued "Statements of Antitrust Enforcement Policy" in a number of areas of provider uncertainty. For integrated delivery systems, the primary focus of antitrust analysis is "market power." Systems without market power (i.e., the ability to force a purchaser to do something that the purchaser would not do in a competitive market) cannot harm consumers and should be free from serious antitrust risk. Where a network may have market power, its activities may be limited only if demonstrable anticompetitive effects outweigh the benefits of the efficiencies claimed by the new arrangement. The chapter concludes that vigorous antitrust enforcement may be required to promote market competition among integrated networks of providers and the managed care plans they serve.

Antitrust Laws↗
PubMed2006

Insuring Californians: a proposal that matters.

The basic provisions of the proposal by George Halvorson and colleagues provide a realistic way for many states to afford coverage for their uninsured residents. In this commentary we suggest some modifications to achieve a more viable plan.

California↗
PubMed1993

Managed competition: origins & implications.

It seems one can't read an article or watch a newspiece about health care reform without encountering the words managed competition. Where did the concept come from? What will it mean if it is implemented? This article discusses the basics of this plan.

Competitive Medical Plans↗
PubMed1996

Physician-run health plans and antitrust. American College of Physicians.

As the health care system changes and large managed care entities gain greater control in some markets, proponents of antitrust reform have expressed concern that physicians could lose their autonomy. To respond to this concern, the American College of Physicians has consistently argued that physicians should be allowed to establish their own health plans and networks to provide high-quality and cost-effective care. Moreover, the College has advocated utilization review reform and due process protections to empower physicians in their dealings with insurers. Under current antitrust law, as interpreted by the federal enforcement agencies, physicians already have the legal authority to form their own health plans and networks, and many state medical societies are sponsoring such plans. The law also allows physicians to operate the clinical components of a health plan, regardless of who owns it. Moreover, physicians can share information about quality, utilization, and, in some circumstances, fees. An examination of federal enforcement agency actions since the mid-1970s shows that physician networks have rarely been challenged. In light of market developments, however, the College has urged the federal antitrust agencies to analyze the effect of their current enforcement policies on physician activities and adopt a more flexible approach. Further monitoring and analysis of the changing health care marketplace are necessary to ensure that physicians are being treated fairly and to determine which factors spur or inhibit the development of physician-run health plans and networks.

Antitrust Laws↗