The Evolution of Health Care Competition Laws

The Federal Trade Commission, in conjunction with the U.S. Department of Justice Antitrust Division, recently held a two-day workshop to analyze the competitive effects of developing health care provider organizations and payment models on the provision of health care services in the United States.

Prior to the 1970s, regulators did not enforce anti-competition laws against professional service providers. However, in Goldfarb v. Virginia State Bar, the U.S. Supreme Court ruled that Congress did not intend any sweeping “learned profession” exclusion from the Sherman Act. Accordingly, a minimum fee schedule for title examinations, as published by the Fairfax County Bar Association, violated the anti-trust statute.

Following the Supreme Court’s ruling, the FTC began to examine restrictions on competition adopted by professional associations. In December 1975, the FTC filed an administrative complaint against the American Medical Association, alleging that the association’s “Principles of Medical Ethics” unreasonably restrained trade by prohibiting advertising and solicitation.

According to the FTC, “Ethical principles of the medical profession have prevented doctors and medical organizations from disseminating information on the prices and services they offer, severely inhibiting competition among health care providers.” The Second Circuit Court of Appeals agreed with the FTC, and the U.S. Supreme Court ultimately affirmed the decision.

According to the FTC, the precedent set forth in the AMA case has influenced more than 100 FTC cases. The FTC’s growing health care initiatives also ultimately led to the creation of the Bureau of Competition’s Health Care Division. In recent years, the FTC has focused its efforts on promoting competition in health care markets, preventing false and deceptive health claims, and improving transparency with respect to health care products and services.

Today, the FTC is again reviewing its health care initiatives in light of the rapidly evolving health care industry, including changes under the Affordable Care Act (ACA). In the Federal Register Notice published in conjunction with the workshop, the FCC identified the following issues of concern: early observations regarding accountable care organizations; alternatives to traditional fee-for-service payment models; trends in provider consolidation; trends in provider network and benefit design strategies, as well as contracting practices and regulatory activity that may enhance or undermine these strategies; and early observations regarding health insurance exchanges.

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