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PubMed1995

The creation of economic efficiencies in hospital mergers.

Antitrust evaluation of proposed mergers requires the assessment of merger-created efficiencies, the beneficial effects of which may swamp any competitively adverse effects of higher market concentration. There are many potential sources of such efficiencies, and this paper investigates one that has been largely overlooked. Because merger often makes it possible to consolidate two small clinical departments into one larger unit, it can reduce the relative variability - the "peak load problem" - of daily patient census. This in turn makes it possible to reduce the costs of staffing adequately for random periods of high demand. Based upon a sample of two years of daily admissions data for several merging hospitals, and confirmed with data averaged over all U.S. hospitals, the efficiency effects of such clinical consolidation are estimated to be a substantial percentage of affected operating costs.

Antitrust Laws↗
PubMed1991

Antitrust policy in the Dutch health care system and the relevance of EEC competition policy and U.S. antitrust practice.

Dutch health care policy is undergoing a radical shift from a planning-oriented towards a market-oriented approach. A fundamental restructuring of the health care financing system should bring about workable competition among providers and among health insurers. As the result of both government regulation and anticompetitive self-regulation strong cartels and dominant positions are deeply rooted in the present Dutch health care system. In order to be successful structural reforms should be supported by an effective antitrust policy. However, present Dutch antitrust policy is too lenient to fulfil this necessary condition. EEC competition policy is far more stringent, but for several reasons its relevance will be limited. For an effective enforcement of national antitrust policy in health care, the so far unique American experience in this field provides some useful lessons.

Antitrust Laws↗
PubMed1992

Workable competition in health care: prospects for the Dutch design.

Since 1989 a gradual restructuring of the Dutch health care system is taking place to realize a multiple choice social health insurance system with workable competition among insurers and among health care providers. This paper investigates whether the structural change will induce the intended competition. An examination of the characteristics of the market for health insurance, physician services and hospital services in the Netherlands points out that the scope for competition is limited. If competition is to work, rather extensive government regulation to monitor the conduct of both providers and insurers is needed. Without an effective antitrust policy a high degree of concentration and collusion is likely.

Antitrust Laws↗
PubMedDate not supplied

Hospital mergers: legal and personal implications for emergency physicians.

In east central Illinois over the last three years, three hospitals in which the authors were contracted as emergency physicians have been in various stages of merger with nearby hospitals. In all, six hospitals will be merged into three "medical centers." This is a basis of experience to be shared with other emergency physicians, as consolidation of health care facilities seems to be a wave of the future due to financial constraints of the health care setting. Lessons to be learned from these experiences involve many issues, including work contract, malpractice insurance payment, physician and nurse staffing, and public information problems.

Antitrust Laws↗
PubMed2004

Business knowledge in surgeons.

BACKGROUND: Surgeons and residents in training receive little, if any, formal education in the economic side of clinical practice during medical school or residency. As medical professionals face shrinking reimbursement, loss of control over health care decisions, and limited resources, surgical specialties must reevaluate the need to teach their members business survival skills. Before designing business related-teaching modules, educators must know the exact gaps in knowledge that exist among surgeons. METHODS: This article reports a survey of 133 surgeons in the Midwest who were asked to rate their knowledge base in 11 business topics relevant to the practice of medicine. RESULTS: The survey showed that the average surgeon perceives himself or herself to be poorly equipped to understand basic financial accounting principles, financial markets, economics of health care, tools for evaluating purchases, marketing, budgets, antitrust and fraud and abuse regulations, and risk and return on investments. CONCLUSIONS: Armed with this data, teaching faculty, health care systems, and medical specialty societies should design business education seminars to better position surgical specialists and trainees to communicate with insurers, hospital administrators, health care organizations, and their own personal financial advisors.

Accounting↗
PubMed2002

Health insurer monopsony power: the all-or-none model.

The textbook model of monopsony that is typically employed in analyzing health insurer monopsony power does not adequately describe the supply decision of physicians confronting a dominant health insurer. Rather than restricting purchases in order to extract a lower price for provider services, monopsonistic insurers are able to obtain discounts from providers without experiencing a decrease in quantity when physicians are forced to operate along their "all-or-none" supply curve. The welfare effects of the all-or-none model of monopsony are compared to those implied by the traditional model.

Antitrust Laws↗
PubMed1998

Economies of scale in non-revenue producing cost centers: implications for hospital mergers.

This paper uses semiparametric methods to estimate the magnitude of economies of scale in 14 non-revenue producing cost centers in hospitals. There are substantial economies of scale in small hospitals, but economies are exhausted in hospitals with over 10,000 discharges annually. In recent hospital mergers challenged by federal antitrust agencies, one or both hospitals had over 10,000 discharges, suggesting that efficiency gains in non-revenue producing cost centers will be small, and could easily be offset by nominal price increases.

Antitrust Laws↗
PubMed1999

Price and profit.

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Antitrust Laws↗
PubMed2004

Provider competition and health care quality: challenges and opportunities for research.

On May 28, 2003, the Agency for Healthcare Research and Quality and the Federal Trade Commission co-sponsored an invitational conference entitled, "Provider Competition and Quality: Latest Findings and Implications for the Next Generation of Research." The main objectives of this conference were to share and discuss the latest findings on provider competition and quality, to identify implications for antitrust policy, and to develop an agenda for further research in this area. While it is impossible to completely capture the rich exchange of ideas and perspectives that transpired at the conference, we highlight several key themes that emerged and present a research agenda to guide future investigations.

Antitrust Laws↗