EXCEPTIONAL EFFICIENCIES A VALUABLE DEFENSE FOR HEALTHCARE MERGERS

• Published in: Columbia law review Vol. 122; no. 7; pp. 1957 - 1996
• Main Author: Gibson, Matthew G.
• Format: Journal Article
• Language: English
• Published: New York Columbia Law Review Association, Inc 01.11.2022
• Subjects: Acquisitions & mergers; Antitrust law; Antitrust laws; Clayton Antitrust Act 1914-US; Clinical outcomes; Consumers; Cost; Cost control; Economics; Fees & charges; Health care; Health care industry; Health care policy; Health insurance; Health services; Hospitals; Medical care; Mergers; Organisation for Economic Co-operation and Development; Patient Protection & Affordable Care Act 2010-US; Patients; Physicians; Prices; Reimbursement; Restraint of trade; Scrutiny; Short term; Supreme Court decisions; Treatment needs; Value; Value-based care; UNITED STATES; United States > US
• ISSN: 0010-1958; 1945-2268

Various forces are driving healthcare providers to pursue integration to reduce prices and improve efficiency. Right now, the dominant payment model for healthcare is fee-for-service, in which a patient is charged for each individual service, test, or visit. An alternative model is value-based care, in which the emphasis is on value as opposed to volume. But to provide value-based care, health systems generally must be integrated enough to connect a patient with all of the physicians they might need. This incentivizes certain health systems to seek consolidation by merging with other hospitals or physician groups. The merging of these entities runs the risk of antitrust scrutiny. Antitrust law in the United States largely measures anticompetitive harm by short-term price increases. There is reason to believe that this emphasis on short-term price increases will stand in the way of otherwise beneficial mergers that pursue the provision of value-based care. This is because it is almost an inherent aspect of the model that consumers may pay greater prices in the short term, but costs are lowered down the line (since patients ideally will need fewer costly treatments). This Note argues that anticompetitive concerns, especially patient costs and quality outcomes, must now be analyzed differently when focusing on the long-term horizon of value-based care.