Sunday, June 08, 2003

Rights & Reason: Bush Conflicted on Health Care?

President Bush's plan to force taxpayers to provide prescription drugs for the elderly has an interesting feature. In exchange for adding a prescription drug entitlement to Medicare, the White House plan would encourage seniors to get out of Medicare altogether and join a preferred-provider organization. PPOs are networks of doctors and health care providers that contract with insurance plans to provide care at a discounted rate.

Why is this interesting? Because while the president and congressional leaders seek to subsidize PPO operations, the Justice Department's Antitrust Division (helped by the FTC) is doing what they can to undermine PPOs. Mountain Health Care, a North Carolina PPO, was forcibly dissolved by the DOJ after government lawyers complained the group was "collectively bargaining" with health plans. Of course, that's precisely the point of a PPO, but the Antitrust Division felt that Mountain was simply too big—i.e., it had too many physicians in the network—and that if allowed to continue operating, the government felt Mountain would ultimately monopolize the market and harm consumers. There was no evidence to support these arguments, of course, but the antitrust laws do not require the government to prove much of anything beyond a hypothetical "injury" to consumer welfare.

This is even more interesting when you consider a case on the Supreme Court's fall docket, an antitrust claim against the U.S. Postal Service. There, the Justice Department claims that permitting such antitrust suits would undermine the Postal Service's government-mandated objectives. Funny how it's okay for the antitrust laws to thwart some arbitrary government objectives, but not others. Apparently the Bush administration can't achieve internal consistency even among its own bureaucrats.

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