Pledges To Reduce Health Care Costs, Spending Growth Could Violate Antitrust Laws, Lawyers Say

U.S. antitrust laws could affect health care industry groups" efforts to work together to rein in health care costs, the New York Times reports (Pear, New York Times, 5/27). In a letter sent to President Obama on May 10, a coalition of groups -- the American Medical Association, the American Hospital Association, Pharmaceutical Research and Manufacturers of America, the Advanced Medical Technology Association, America"s Health Insurance Plans and the Service Employees International Union -- pledged to reduce the annual health care spending growth rate by 1.5%. The groups did not elaborate on what specific measures they would use to achieve such reductions, but the Obama administration has requested specific plans from the groups by June 1 (Kaiser Daily Health Policy Report, 5/26). According to the Times, many of the plans being considered by the health care industry would require greater cooperation across health care providers. Robert Leibenluft, a former Federal Trade Commission official, said, "Any agreement among competitors with regard to prices or price increases -- even if they set a maximum -- would raise legal concerns." In addition, while Obama is asking for specific plans from the health care industry, the administration has not offered any relief from antitrust laws, the Times reports. Furthermore, during his campaign Obama pledged to increase enforcement of antitrust laws, according to the Times.Antitrust laws have had a negative effect on previous health reform efforts, the Times reports. In 1993, the drug industry established a voluntary cost control plan that limited each drug company"s annual increase in the average price of prescription drugs to the increase in the Consumer Price Index, but the Department of Justice ruled that the proposal would violate antitrust laws. DOJ officials said that the U.S. Supreme Court made it clear that setting price maximums was akin to setting price minimums, which is illegal. In a letter to the Senate Finance Committee, AHA wrote that uncertainty regarding the enforcement of antitrust laws "makes it difficult for a hospital and doctors to collaborate to improve care" and reduce costs. AMA has asked Congress to amend antitrust laws to allow physicians to collectively negotiate with insurers over fees and other concerns, but FTC repeatedly has designated the practice illegal price-fixing, according to the Times. FTC officials said that consumers could benefit from cooperation among health care industry groups but that cooperation also could lead to increased bargaining power for physicians and hospitals, making it easier for them to set prices and eliminate competition (New York Times, 5/27). Reform Developments