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Publication Date

7-1996

Document Type

Article

Abstract

Now more than a hundred years old, the federal antitrust laws seek generally to promote and preserve business competition. Over the past twenty years, courts and regulatory agencies have applied this broad goal in a narrow economic sense, defining "competition" not as rivalry, for example, but as those forms of business activity most conducive to "consumer welfare." Consumer welfare, in this sense, is thought to be maximized when markets produce the greatest output of goods or services at the lowest prices with the widest range of consumer choice. For purposes of analysis, antitrust courts view all markets and market participants through the same economic lens: services are not distinguished from goods nor are nonprofit firms given a dispensation unavailable to the for-profit sector.

During the same two decades, vigorous application of the antitrust laws to the activities of organized health care providers has played a critical role in moving health care markets in the direction of greater competition. Starting with the United States Supreme Court's decision in Goldfarb, which declared that professionals enjoy no special exemption from the federal antitrust laws, a series of important opinions identified and prohibited significant forms of anticompetitive conduct in the health care field. At the same time, federal antitrust enforcement facilitated the emergence of new, more efficient forms of health care delivery by consistently examining the efforts of market incumbents to prevent or impede new forms of competition. The Federal Trade Commission, for example, successfully challenged the American Medical Association's ("AMA") ethical proscriptions against competitive contracting and affiliation with Health Maintenance Organizations ("HMOs"). Courts repeatedly struck down efforts by physicians and hospitals designed to destroy competition from innovative financing arrangements' or from alternative care providers and prohibited attempts by physician and hospital groups to fix collectively the prices that their members would charge consumers.

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