Antiturst implications of health care cost controls

NY Times:

President Obama’s campaign to cut health costs by $2 trillion over the next decade, announced with fanfare two weeks ago, may have hit another snag: the nation’s antitrust laws.

Antitrust lawyers say doctors, hospitals, insurance companies and drug makers will be running huge legal risks if they get together and agree on a strategy to hold down prices and reduce the growth of health spending.

Robert F. Leibenluft, a former official at the Federal Trade Commission, said, “Any agreement among competitors with regard to prices or price increases — even if they set a maximum — would raise legal concerns.”

Already, some leaders of the health care industry who appeared at the White House on May 11 say the president may have overstated their cost-control commitment. Three days after the gathering, hospital executives said that they had agreed to help save $2 trillion by gradually slowing the growth of health spending, but that they did not commit to cutting the growth rate by 1.5 percentage points each year for 10 years.

Obama is becoming known for his overstatements in support of his objectives. His speech about Caterpillar rehiring workers if the stimulus was passed has become notorious.

But something else may be a work here. Certainly the antitrust laws have an impact on competitors ability to reach agreements on price that should be set by the marketplace. But, it would not surprise me for these concerns to be used as an argument in favor of government controlled prices or government health care in general. It is just too convenient for where Obama wants to go with his rationed health care plans.


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