Two years of hearings into healthcare competition conducted by the Federal Trade Commission and the U.S. Justice Department's antitrust division have boiled down to a jolting recommendation: abolish certificate-of-need laws.
The report released today, Improving Health Care: A Dose of Competition, also recommends eliminating other barriers to competition and seemed to support the growth of specialty hospitals, pay-for-performance incentives and expanded state licensure boards as ways to increase quality and lower healthcare costs.
The agencies reiterated their opposition to collective bargaining by independent physicians and provided a roadmap for state and federal legislators to increase competition in healthcare to lower costs and improve quality.
More than 6,000 pages of transcripts over 27 days of hearings that began in 2002 were culled to produce the 361-page report.
The report does not reveal any new agency positions.
The report emphasizes the agencies' support of competition, provides an overview of a complex and highly regulated industry and explores the impact of regulation on competition.
Paul Ginsburg, president of the Washington-based Center for Studying Health System Change and a witness at the hearings that led up to the final report, said the FTC/Justice Department's views on hospital mergers will have some impact.
"That is their job and they have tools for that," Ginsburg said. "But I wouldn't expect states to be swayed by their preaching to abolish CON laws and reduce barriers for specialty hospitals."
Anne Haule, a healthcare lawyer with Ungaretti & Harris who represents hospitals in transactional and regulatory cases, said the report's findings may not be greeted with great enthusiasm by tax-exempt hospitals.
"Nonprofit hospitals view certificate-of-need laws as necessary protections," she said. "This report seems to urge their elimination and let the free market reign."
"I think that's going to be viewed as problematic by tax-exempt hospitals in states with CON laws," she said. "But the FTC is looking at this from the perspective of consumers, not competitors."
For more on this story, see the upcoming Monday issue of Modern Healthcare.