Monday, August 11, 2003

Antitrust News: Hospital Wars

The Justice Department's witch-hunt for antitrust violations in the hospital industry continue:
The Department of Justice is scrutinizing Premier Health Partners, apparently to see if the seven-year-old hospital merger has violated antitrust law by resulting in higher prices than would have happened otherwise.

"We have no reason to believe that the action is anything but a routine investigation," Dale Creech, Premier's chief legal counsel said Friday. The Justice Department indicated several months ago that it would review some of the many U.S. hospital mergers in the 1990s, he said, and Premier is among more than a dozen to have received requests for information.

A Justice spokeswoman declined to comment on the investigation, or even to confirm its existence, citing office policy not to discuss any ongoing matters.

"We're providing a lot of documentation about what we've done since the affiliation in terms of cost-savings and improving efficiency," Creech said. "We are cooperating fully."

Miami Valley and Good Samaritan hospitals have operated jointly as Premier since 1996, when the Federal Trade Commission decided not to challenge the affiliation on antitrust grounds. Fidelity HealthCare, Samaritan North Health Center, Maria-Joseph Living Care Center and a physicians network are also part of Premier.

The entities have cut costs by consolidating administrative departments, purchasing in greater quantities, avoiding duplication of medical equipment and sharing more effective medical and administrative practices, Creech said. The savings have grown year by year to more than $50 million annually "that the citizens of the Miami Valley no longer have to pay," he said.
Think about this: The Clinton administration FTC decided not to challenge this merger when it took place, but the Bush administration FTC--which allegedly represents the pro-business conservative Republican way of life--is looking to undo mergers years after they were completed. How this fits in with "compassionate conservatism," I don't know. What I do know is that at a time when the economy is still in recovery, meritless investigations like this divert valuable resources from economic production to the enrichment of lawyers, both in the government and those inevitably retained by the hospitals.

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