On Joel Klein's watch, the Department of Justice increasingly focused on antitrust issues and preventing the monopolization of industry.
Klein's belief that antitrust law should be rigorously enforced led to the prosecution of Microsoft and countless verdicts in smaller cases, including some in healthcare.
As assistant attorney general, Klein headed Justice's antitrust division for 5 1/2 years before resigning Sept. 19, one of a number of departures as the Clinton administration draws to a close. Doug Melamend, Klein's principal deputy, was named acting assistant attorney general for the antitrust division.
But industry observers say more important than who Klein's successor will be is who will occupy the White House, the decisions of career attorneys in the federal government and whether the Federal Trade Commission continues its aggressive enforcement of antitrust in the healthcare field.
"(People) may think there's only one enforcement officer or that Joel Klein is the master puppeteer pulling all the strings in antitrust enforcement," says Kevin Grady, a healthcare antitrust attorney with Alston & Bird in Atlanta.
"There are two separate agencies enforcing antitrust (law). Even if the administration were to change, the new attorney general won't impact the FTC on . . . antitrust enforcement."
The actual day-to-day enforcement and overview of antitrust at the FTC and Justice are by career attorneys. "Ultimately, the (attorney general) would have to sign off on any action that would be taken," Grady says. "Even a change in administration would not necessarily have any impact on the antitrust (enforcement) by the Federal Trade Commission."
In other words, a win by Texas Gov. George W. Bush, the Republican candidate for president, wouldn't necessarily open the gates to physicians collectively negotiating with health plans or forming coalitions that refuse to accept reimbursements below a certain level. Bush hasn't commented on the issues, but conventional wisdom has it that a Republican administration would be more permissive of collective negotiation and similar activities.
The FTC has been most active recently in pursuing antitrust in the healthcare field, Grady says. Unlike the Department of Justice, the FTC is an independent body. The party that occupies the Oval Office appoints three people to the commission and the minority party appoints two. It's less likely to be influenced by political appointments such as the attorney general and is less likely to be significantly changed by a new administration. Although they are political appointments, they are less at the mercy of politics than the Justice Department.
The FTC has consistently come down hard on physicians who fix fees or jointly negotiate with health plans.
The most recent example is an agreement with a Fairbanks, Alaska, physicians' association that settled charges that it and its members fixed prices and kept health plans from doing business in the area. The physicians agreed to several stipulations, including refraining from similar practices and limiting how many physicians from the market would be in their group.
Grady expects that type of antitrust enforcement to continue, regardless of who takes the oath of office in January. Neither candidate has spoken directly on antitrust enforcement.
"The common wisdom is that if (Vice President Al Gore) is elected, then the attitude of antitrust enforcement will be the same," Grady says. "If Bush is elected, the attitude, the enforcement may change to be less aggressive in the area."
Klein was known as a tough antitrust enforcer who believes in the principles of antitrust laws and the importance of stringent enforcement, says William Kopit, a healthcare antitrust attorney with Epstein, Becker & Green in Washington.
There are antitrust attorneys who believe it would be wrong to intervene in markets, Kopit says. "That certainly was not his view."
A few months ago Kopit heard Klein speak about healthcare antitrust. "He volunteered that he thought healthcare (cases) were the toughest issues that the division had to address because of the healthcare markets," Kopit says. "I was surprised by that comment. I agree with it. I just never expected him to say it." There were some notable healthcare antitrust cases that were litigated under Klein's watch, Kopit says.
Klein took a much more aggressive approach toward healthcare antitrust cases than did his predecessor who held the post in the early 1990s. In particular, Klein's department looked long and hard at many of the large hospital mergers of the past decade, including Morton Plant Mease in Florida. Klein's office ordered AetnaUSHealthcare to divest itself of NYLCare holdings in Texas before completing its purchase of Prudential. That agreement came after physicians and the AMA voiced loud and repeated concerns that Aetna would control too much of the market.
But the case he litigated that will have the longest, most significant impact is Microsoft--a case that had nothing to do with healthcare. "It obviously signaled the department is going to be pretty aggressive in antitrust . . . It does permeate to everything," Kopit says.
Grady says he doesn't think Klein's departure will affect the Clinton administration's antitrust enforcement and says he would be surprised if a new antitrust head is named before the new administration takes over.
One issue that will continue to catch the attention of federal antitrust officials, regardless of who heads the division, is collective physician negotiations.
Klein, the Justice Department and the FTC have aggressively fought against the Campbell bill, which would give physicians federal permission to collaboratively negotiate with health plans. Congress appears unlikely to pass the bill, sponsored by Rep. Tom Campbell (R-Calif.), before the session ends.
Texas was the first state to allow physicians to collectively negotiate, and several states considered similar measures during their most recent legislative session.
Federal antitrust officials testified against the Texas bill, which spells out how and when physicians can negotiate under rules outlined by the state's attorney general.
That kind of testimony and action on the state and federal level likely will continue, Grady says.
"Don't read too much into the resignation of Joel Klein," Grady says. "It's a nonissue."
Two-pronged attackThe antitrust roles of federal agencies
The Federal Trade Commission can issue administrative cease and desist orders as provided under the Clayton Act, which prohibits acquisitions that may tend to substantailly limit competition. That act also bars price discrimination. The FTC also can order that administrative civil penalties be paid and fine those who violate cease and desist orders.
The Department of Justice can issue judicially ordered injunctive relief as provided under the Clayton Act. The department can recover for damages suffered by the government and enforce judicially ordered civil penalities. The department also relies on the Sherman Act, which addresses monopolization.
Source: Federal Trade Commission