The Arrangement of the Case
In the case of South Georgia Health Partners et al., the respondents were organized into a group recognized as the Physician-Hospital Organization (PHO), which typically comprises fifteen healthcare facilities and approximately 500 doctors. The respondents infringed and continue to violate Section 5 of the Federal Trade Commission Act (The Federal Trade Commission, 2003a). The respondents have declined to engage with the insurers personally because they are unwilling to agree to the unified term in the complaint provided. As a result, the cost of health insurance in South Georgia has risen. As a result of the respondents’ failure to disclose a significant financial burden associated with providing their services, there is unfair competition in the market.
The Decision of the FTC
However, when an agreement is unavoidably unlawful, the outcomes render it unlawful; the arrangement is deemed to be unlawful per se. The agreement in question is allegedly illegal because it could lead to unfair competition in the market, which would sap resources from competing hospitals and doctors. The respondents are considered to have broken the law because it bequeaths the PHO elite’s power in the area. The Federal Trade Commission (FTC) issued an order to stop the careless behavior, directing all respondents, whether directly or indirectly affected, to cease enabling any amalgamation, arrangement, or conspiracy among healthcare professionals (The Federal Trade Commission, 2003b). Additionally, respondents should refrain from coercing individuals into entering into a contract or working with the payor, and from expediting data sharing among doctors regarding their readiness to negotiate.
Possible Changes to the Agreement to Prevent an Illegal Ruling
Several steps are being taken to promote a healthy, competitive market between doctors and healthcare facilities and to avoid a ruling that the PHO agreement is illegal. First, developing the framework so that it can be judged against the rationality rule, rather than being illegal in and of itself, can help clarify joint price-setting and bargaining (U.S. Department of Justice and the Federal Trade Commission, 1996). This reform is referred to as clinical integration. Clinical integration can be achieved by establishing systems that track, control, and ensure that consumers receive high-quality care while monitoring spending and consumption. The rule of reason can be applied where competitors successfully integrate their finances and medical practices to create efficiencies that benefit their clients.
Cooperative contracting is another necessary revamp hold. It is essential because it upholds a consistent board of doctors with similar views and a shared objective (Office of Inspector General, U.S. Department of Health and Human Services, 2012). Without joint contracting, each doctor would assess each agreement individually before deciding whether to participate. These two main restructuring frameworks are crucial in the assessment to prevent the agreement’s outcome from being illegal per se.
The Alternative FTC Analysis Used in Cases of Suspicion
The competitive impacts of the PHOs are examined using an analytical basis. Contracts not contested as infringing are subject to an alternative FTC investigation, known as the rule of reason investigation. This regulation is crucial because it controls the overall competitive impact of PHOs.
The central emphasis of the rule is on the level of competition, regardless of whether an applicable accord exists or not (U.S. Department of Justice and the Federal Trade Commission, 1996). Suppose the relevant accord aggregates the potential to raise pricing above or lower outcome, value, and progress below what would occur in the absence of the contract. Does it tamper with the competition, and if so, to what extent? This premise is a fundamental question that emerges during analysis (Inspector General’s Office, U.S. Department of Health and Human Services, 2012). While applying the rule of reason, the organization’s primary concern is to identify the elements necessary to make a thorough and satisfactory determination regarding the general competitive impact of the contract.
References
The Federal Trade Commission. (2003a). In the matter of South Georgia health partners, et al., FTC docket No. C-4100: Complaint. ftc.gov. Web.
The Federal Trade Commission. (2003b). United States of America 011 0222 before Federal Trade Commission: Decision and order. The Federal Trade Commission. Web.
Office of Inspector General, U.S. Department of Health and Human Services. (2012). Tips for implementing an effective compliance program. Youtube. Web.
U.S. Department of Justice and the Federal Trade Commission. (1996). Statements of antitrust enforcement policy in health care. The United States Department of Justice. Web.