As an antitrust attorney with 45 years of experience, I believe the Federal Trade Commission should reverse the decision by the administrative law judge, Stephen McGuire, ordering the divestiture of Highland Park (Ill.) Hospital by Evanston (Ill.) Northwestern Healthcare ("Splitting headaches," Nov. 14, p. 17). If this decision is not reversed, all mergers of hospitals--no matter how long ago the merger occurred--are in jeopardy of facing challenges by enforcement agencies if the resulting organization raised its prices post-merger.
McGuire's decision is flawed for several reasons, one of which is the failure to examine properly relevant market data. He limited the product market to general acute inpatient hospital services provided to managed-care organizations, a much-too-narrow definition that has never been adopted by any court. It is settled law that the proper product market involved in the merger of general acute-care hospitals is the "provision of inpatient services by acute-care hospitals" in "a reasonably defined (geographic) market" (U.S. v. Rockford Memorial, 1990).
An accurate examination of the product market of general acute inpatient hospital services would have revealed that the patients served by ENH have alternatives to managed-care organizations, with which they finance their hospital services. It seems that the primary purpose of this product market definition was to substitute the insurers' opinions on where patients go for hospital care instead of the actual data showing where patients have gone and will probably go in the future.
The judge's version of the market excluded seven major hospitals in Chicago and its suburbs that are closer in miles and driving time than ENH's Evanston Hospital is to Highland Park Hospital. It also ignored the very real competitive presence of major medical-school teaching hospitals in Chicago, such as Northwestern Memorial Hospital, Rush University Medical Center, Loyola University Medical Center and the University of Chicago Hospitals. In the surrounding counties there are a total of 69 general acute-care hospitals run by 45 separate entities with a total of 19,736 staffed beds.
The decision ultimately found that ENH used increased market power resulting from the merger to raise its prices above competitive levels. McGuire rejected three alternative explanations for the price increase, all of which deserved more weight than they were given: changes in patient demand; changes in quality of services and care resulting from the ENH investment of $120 million in Highland Park Hospital; and changes in customer mix. Ignoring the $120 million in improvements to Highland Park Hospital shows a disregard for the millions of dollars spent by well-run hospitals to improve patient care.
Finally, the judge did not cite any testimony by patients at Highland Park Hospital that they were in any way injured by the merger. Without injury to consumers, there is no injury to competition.
If this decision is not reversed, all healthcare providers across the country that have increased their prices post-merger are vulnerable to challenges by enforcement agencies and face possible divestitures, a result that could also adversely affect patients across the country.
John Cusack Chairman Antitrust department Gardner Carton & Douglas Chicago
Gardner Carton & Douglas
Anyone who has had to care for patients in a long-term acute-care facility would recognize in an instant that the accessory services--laboratory, X-ray, etc.--are nowhere to be found in a skilled-nursing facility ("Two in one," Nov. 7, p. 26). Cheaper, in this instance, is not better. Patient care will be significantly compromised by the possibility of placing LTACs, with their sicker patients, in SNFs.
Robert Schlesinger Director Urologic Services New England Sinai Hospital and Rehabilitation Center Stoughton, Mass.
New England Sinai Hospital and Rehabilitation Center
Jumping through hoops
I was thoroughly disgusted by your article about administrative costs in healthcare ("Providers share the blame," Nov. 21, p. 18). That you would swallow the California Association of Health Plans' line without any analysis astounds me.
Why did you not consider the possibility that the administrative costs incurred by physicians and hospitals are caused by the onerous and odious documentation requirements foisted upon them by insurers? This report only vindicates the insurance industry in the eyes of people who know nothing about the healthcare industry.
There is no other profession on this planet whose members must jump through so many hoops to get paid for their services as medicine. In some cases it costs more to get paid than the actual payment eventually received. I got so sick of it that I left clinical practice and now work for a healthcare IT vendor. The time has clearly come to do away with the entire health insurance industry and go to some sort of single-payer system.
Steve Allen Taylorsville, Utah
AHRQ de Triomphe
As a member of the Agency for Healthcare Research and Quality's National Advisory Council, I would like to commend AHRQ and the CMS for their hard work and perseverance in developing the Hospital Consumer Assessment of Health Providers and Systems ("Getting satisfaction," Dec. 12, p. 6). It is not an easy task to reach national consensus on patient satisfaction assess- ment tools.
For the first time, comprehensive comparisons will be available throughout the U.S. Reporting will allow any consumer, in any state, to compare hospital performance using the same measure.
Hospitals will likewise gain from the most thorough benchmarking imaginable. Congratulations to AHRQ and the CMS.
Michael Everett Chief executive officer Avatar International Sanford, Fla.
Chief executive officer
Profits yes, but mission first
I am appalled by the short-sighted impression created by your cover story on disease management ("The price of good intentions," Nov. 28, p. 6).
The goal of disease-management programs is to improve the health of those with chronic diseases. One of the outcomes may be less utilization of acute services, which may affect providers' bottom lines.
However, as demand for health services continues to rise and the economic effect is felt by all consumers (and taxpayers), shouldn't we be looking for innovative ways to help manage the growth so that our health system as we know it can survive for generations to come?
I have been in healthcare finance for 30 years and a chief financial officer for more than 25 of those years. I have no problem with hospitals generating a profit and have helped my employers do so quite successfully my whole career.
However, one of the main attractions to a healthcare career was the mission-driven philosophy that is characteristic of a majority of the industry.
Ken Payne Chief financial officer Institute for Orthopaedic Surgery Lima, Ohio
Chief financial officer
Institute for Orthopaedic Surgery