Georgia voters will be asked in November whether they want to amend the state constitution to allow hospitals and other providers to engage in anti-competitive mergers as long as benefits outweigh disadvantages.
The Georgia Hospital Association and the Medical Association of Georgia have united to support the constitutional amendment, which requires only a majority vote for ratification.
They are squaring off against the insurance industry in Georgia. A spokeswoman for a coalition opposing the amendment said the measure would give providers "an unfair advantage over the insurance industry (that) no other group has." The coalition includes five of the state's largest insurers and several big employers, the spokeswoman said.
Hospitals and physicians are banding together in Georgia to sign managed-care contracts with payers and employer groups. They believe merging will help reduce their transactional costs, which can be passed on as savings to patients.
A constitutional amendment is necessary to allow the Georgia Legislature to approve a bill giving a specific state agency the authority to grant antitrust exemptions. If passed, Georgia would join 17 states that have enacted laws to protect certain healthcare providers from federal antitrust scrutiny, said Holly Bates, the GHA's assistant director of legislative services.
Georgia is the only state that prohibits anti-competitive legislation in its constitution, Ms. Bates said. The 17 states have legislation that allows mergers and other collaborative ventures under the "state action" antitrust immunity doctrine.
Under that legal doctrine, states may bypass federal antitrust laws if there is a "clearly articulated and affirmatively expressed" state policy. In addition, the anti-competitive conduct must be supervised by the state.
But a General Accounting Office report issued last month indicated that hospitals have used the state laws only three times to put together collaborative deals (Sept. 12, p. 6).
Ms. Bates said Georgia hospitals will take advantage of the antitrust exemption law if it's approved.