Antitrust relief for hospitals is OK, but for physicians? Enough is enough, says the hospital industry.
The American Hospital Association, the nation's largest hospital trade group, and Premier, one of the nation's largest hospital purchasing alliances, oppose pending federal legislation that would allow competing physicians to collectively negotiate prices for their services with payers.
"We feel the guidelines developed by the Federal Trade Commission and the (U.S.) Justice Department are sufficient to address these concerns, and that this legislation is unnecessary," said Thomas Nickels, the AHA's senior vice president for federal relations.
Under current federal antitrust laws, competitors can't collectively set prices for their services. Such price-fixing activities typically are considered a per se, or automatic, violation of the laws.
That prohibition doesn't apply to employees, members of a union or merged corporations that no longer operate as competitors.
The bill opposed by the hospital organizations was introduced by Rep. Tom Campbell (R-Calif.). It would effectively carve out a specific exemption for competing physicians.
At deadline, American Medical Association executives had not responded to calls seeking their reaction to the hospital industry's opposition to Campbell's legislation.
The House Judiciary Committee heard testimony on the bill last week. Six witnesses, including Campbell and AMA Executive Vice President E. Ratcliffe Anderson, M.D., testified in favor of the legislation. Anderson argued that HMOs wield too much power over fees and patient-care decisions, and the only way to ensure that physicians have more say in those matters is collective bargaining.
Six other witnesses, including top officials at the FTC and the Justice Department, testified against the legislation because they said it would raise costs and hurt consumers. No hospital groups testified.
The FTC and the Justice Department faced a similar antitrust relief push from hospitals and physicians in the early 1990s, when those groups were complaining that existing laws and enforcement policies inhibited mergers and other forms of collaboration.
Although the boom of hospital mergers and physician network formation proved that position groundless, the FTC and the Justice Department did release a series of antitrust enforcement guidelines to help providers structure their deals to avoid anti-competitive problems.
Organized medicine, led by the AMA, criticized the first two sets of guidelines, issued in 1993 and 1994, respectively, for benefiting hospitals and not doing enough for physicians.
The third set, though, lowered the legal bar for physicians considerably. In September 1996, the FTC and the Justice Department said collective fee-setting by physicians in noneconomically integrated networks wouldn't be automatically illegal. Instead, the government would consider the actual effects of such arrangements before ruling on their legality.
It's those guidelines that the AHA contends are sufficient.
And so does San Diego-based Premier, which represents 1,700 hospitals and HMOs owned by those hospitals.
"The changes to our antitrust laws proposed in (Campbell's bill) would greatly fragment our delivery system," James Scott, president of the Premier Institute in Washington, wrote in a June 17 letter to Rep. Henry Hyde (R-Ill.), who chairs the House Judiciary Committee.
Hyde is undecided on Campbell's bill.
Led by the AMA, 44 physician groups are aggressively pushing Campbell's bill. But some physician groups aren't on board.
The American College of Physicians-American Society of Internal Medicine is not formally endorsing the bill. The ACP-ASIM, with 115,000 members, is the largest specialty group.
Robert Doherty, the group's senior vice president of governmental affairs and public policy, said the ACP-ASIM is working on a detailed position paper to be released later this summer.
"We favor putting clearer boundaries around the actions physicians should take so that this doesn't become anti-consumer," Doherty said. "Negotiations should be limited to quality and access to care, not fee schedules."
The American Medical Group Association is standing on the sidelines, unsure if the measure would help or hurt its members, most of whom are already exempt from antitrust laws as employed members of single corporations.