"An agreement filed Mar. 4 in U.S. district court ends a nearly decade-long battle between five chiropractors and the Illinois State Medical Society over the role of chiropractic in the health care delivery system. In their original 1976 lawsuit, the plaintiffs alleged that the American Medical Association (AMA), the AHA, and a group of 11 other health care organizations and individuals conspired to contain and eliminate chiropractic practice in the United States, and that these organizations had barred their members from making referrals to chiropractors."
March 8, 1985
Not exactly sizzling or precise news copy, but covering the Wilk case was enough to get me hooked on healthcare antitrust issues. That was the lead of the first story I wrote for Hospital Week, a long-defunct four-page newsletter published by the American Hospital Association. It was my first week on the job at the "blue sheet," as it was called, and my managing editor handed me a copy of the antitrust settlement. She said, "Maybe you can understand this."
Over the next 17 years, I wrote or assigned hundreds of healthcare antitrust stories. What tied the coverage together was my belief that competition in healthcare was no different from that in any other industry in that it controlled prices, improved quality of care and increased the availability of services.
For a time, the Federal Trade Commission, the U.S. Justice Department and many state attorneys general behaved as if they believed the same thing. They investigated monopolistic hospital mergers, price-fixing hospital joint operating agreements, sham physician unions, unintegrated physician-hospital organizations, illegal steering of patients to hospital-owned ancillary services, boycott-happy physician independent practice associations, alleged criminal price-fixing schemes by allergists and dentists, and anticompetitive advertising restrictions by several healthcare associations.
And boy, did the healthcare industry howl. "We're different!" was the rallying cry. "Competition causes a medical arms race!" Every merger was "community-driven" and "would benefit consumers by generating (fill in the blank) millions in savings over (fill in the blank) years that would be passed along to consumers in the form of lower prices and better services." Antitrust laws and enforcement policies "hindered" beneficial business arrangements among providers. Driven only by their concern for their patients, physicians said they needed antitrust exemptions to "level the playing field" with health insurers.
Healthcare executives gave Modern Healthcare a lot of grief for not parroting the industry mantra on the evils of competition in healthcare. (They didn't want to be regulated, either, but that's another editorial.)
Yet the healthcare industry's unwavering portrayal of itself as a victim of heartless antitrust enforcement eroded government resolve. Ironically, at the same time, the industry, especially hospitals, operated virtually unimpeded in rushing together merger after merger in the 1990s as federal lawyers in paper-crammed small offices tried to keep up. Faced with industry-spurred congressional action that could have reduced their antitrust authority, the FTC and the Justice Department issued special healthcare antitrust enforcement guidelines-the first such guidelines issued for any industry, ever. After more industry whining, the agencies issued an expanded set of guidelines that gave providers even more latitude.
Then the government lawyers who had believed in the benefits of healthcare competition began hopping the fence, going into private practice to represent hospitals, physicians and others. Their new clients "were different" from the providers they had investigated and sued; they were helping their communities, not like those other hospitals and physicians. The feds, meanwhile, were replaced by lawyers from the private sector who previously defended those other hospitals and wanted an FTC or Justice Department entry on their resumes.
The prosecutors became the defenders, and the defenders became the prosecutors. Federal investigations slowed to a trickle. Court challenges were virtually nonexistent. Easily swayed state legislatures began passing healthcare antitrust exemption laws for hospitals and physicians. Dozens of two- and three-hospital towns became one-hospital towns.
Physicians could share competitive information as long as they did it the right way. Health insurers grew larger through mergers and acquisitions. The same happened with pharmaceutical companies and other healthcare suppliers and vendors. And now only a handful of state attorneys general across the country seem to care.
In our Jan. 14 issue, reporter Mark Taylor wrote about the Justice Department eliminating its 17-attorney healthcare task force (p. 14). In the same issue (p. 12), reporter Ed Lovern wrote about the fact that national healthcare expenditures grew 6.9% to $1.3 trillion in 2000, the fastest acceleration in national healthcare expenditures in 12 years and the second consecutive year in which healthcare spending exceeded the gross domestic product in percentage growth.
I think I understood perfectly.