The Federal Trade Commission hopes to study the effectiveness of its orders for divestitures of hospitals, clinics and pharmaceutical companies, the agency said Friday. The commission wants to expand on a 1999 divestiture study to discover whether 92 orders made between 2006 and 2012 across a number of industries, including healthcare, met their goals.
The commission's divestiture actions have stirred concerns in healthcare. Some have felt the FTC's divestiture orders in healthcare have been at odds with the goals of the nation's new healthcare law. The law encourages providers to increase efficiency, lower costs and improve care—aims that can be accomplished through consolidations. But the FTC has challenged a number of such mergers and acquisitions as anticompetitive.
In at least one noted order, however, debate revolved around whether the FTC accomplished what it sought while stopping short of an outright divestiture order. The FTC in 2007 decided that a 2000 Evanston (Ill.) Northwestern Healthcare merger (for what is now called NorthShore University HealthSystem) led to anti-competitive price increases, but didn't require divestiture. Instead the FTC ordered two of the system's hospitals to bargain separately from the acquired hospital for managed-care contracts.
Each year, the FTC enforces antitrust laws by challenging mergers it deems anti-competitive. Much of the time, the challenges result in orders for the companies to divest certain assets.
For the study, the FTC wants to send questionnaires to those who bought divested assets in 15 orders involving drugstores, hospitals, clinics, supermarkets and funeral homes. For 24 orders involving the pharmaceutical industry, the FTC wants to look at information from compliance reports, monitors and publicly available sources.
For another 53 orders across a variety of industries, the FTC hopes to interview buyers of divested assets and big competitors in each market, among other things. If the FTC did not order a divestiture, the commission proposes seeking voluntary interviews with competitors and customers, though it could make such interviews compulsory if necessary.
Following its last study in 1999, the FTC made several changes to its divestiture process, including shortening the length of the divestiture period and requiring monitors more often.
After the comment period ends, the FTC will request clearance from the Office of Management and Budget to start the study and publish another request for comment. Public comments can be sent electronically or written comments can be sent to FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580.
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