Wednesday, September 24, 2003

Antitrust News: Beware the FTC

Jeff Brennan, the FTC's chief inquisitor on healthcare, has threatened a new physician network in San Francisco with prosecution unless they follow the Commission's antitrust regulations that forbid doctors from acting in their economic self-interest. Here's the key paragraph in Brennan's letter to the proposed group, Bay Area Preferred Physicians (BAPP):
BAPP will be authorized to contract with any payer on behalf of physicians whose minimum payment requirements are at or below the payer's offer. The BAPP messenger also will notify those physicians whose minimum payment demand exceeds the offer that they have one opportunity to "opt in" to a contract containing the payer's offer. This notice will not reveal the number or percentage of BAPP physicians whose payment levels met or were below the payer's offer. BAPP also might provide objective information to its members to help them understand the contract terms. You have represented that BAPP and its messenger will not recommend that the physicians accept or reject an offer, opine on the appropriateness of price or other competitive terms, present contract information that suggests an opinion on whether the physicians should accept a particular contract term, or otherwise attempt to facilitate any coordination among the physicians on such terms.
This is a naked restraint of free speech. It is also a deliberate effort by the FTC to sabotage the ability of physicians to negotiate higher prices with managed care programs. If physicians cannot talk to one another about their negotiations with an HMO, the result will be low contracts for everyone. Brennan's letter literally makes it a criminal act for two doctors to have lunch and talk about a proposed HMO contract.

And in the end, BAPP can do everything they told the FTC they would and still find themselves in violation of the antitrust laws. Since the FTC has unilateral and arbitrary authority to decide what conduct is legal, they can simply decide BAPP's mere existence is too big a risk to the financial interests to HMOs. I strongly suspect BAPP won't survive when all is said and done.

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