Healthcare institutions are important components of the society, and so are healthcare practitioners. The success of any nation greatly depends on the health status of its people. Countries that have a history of disease prevalence register slow economic growth and the vice versa is true. The health industry via healthcare facilities and its practitioners facilitates the health status of a nation. For this reason, healthcare organizations are vital to the social, economic, and political stability of a nation. In most nations, major healthcare organizations are non-profitable organizations funded by the government and other non-governmental institutions. Governments unite through treaties and international goals like the Millennium goals to improve the general status of health around the world (Cooper, 2013).
The management of healthcare facilities by the government, however, makes it harder for health institutions to achieve the expected targets. As such, governments allow the private practice within the health industry to operate within certain boundaries. The private practice helps reach a larger group of people, hence improved health. Competition within the health industry, especially among hospitals and private practitioners is a healthy business approach because it helps in regulating the industry (U.S justice department & FTC, 2009). However, business executives within the industry have come up with a way to join forces and kill the competition, thus making the cost of the health acquisition rather high. The Federal Trade Commission (FTC) helps regulate such activities that compromise the quality of health and cost of acquiring health care services in the United States of America.
FTC prevents hospitals and practitioners from forming treaties and agreements that limit the competitiveness of the industry. The action of a physician-hospital organization in the United States to try to negotiate terms with third parties for its members is an illegal act in the FTC manifesto. The purpose of forming the treaty was to allow the hospitals and healthcare personnel operating alone a better way to negotiate their prices for their personal interest (Cooper, 2013). The arrangement did not consider the impacts of such activities to patients who are their daily consumers nor did it consider the third parties within the industry. The refusal of the hospitals and the health care personnel to negotiate terms with third party payers is a per Se illegal act according to the FTC (Cooper, 2013). The ability of individual organizations to negotiate differently ensures that there are enough options within the industry for all people. Increasing the cost of care is detrimental because it limits access to care, especially to the people living in poverty. Additionally, it makes it hard for the third parties to serve the society effectively because they cannot negotiate with healthcare institutions on behalf of the society.
On the other hand, the actions of the individual hospitals and the umbrella organization violated the antitrust principles of the FTC. The sole reason for merging should be to improve the effectiveness of the operation and enhance economic growth for the greater good rather than personal gain. As such, the actions of the individual hospital are illegal because they do not enhance trust and openness within the industry. The governments of the world focus on making sure that all people get medical, and health insurance covers for a better society. The failure of the hospitals to negotiate terms with the third party limits the success of the government efforts (Creighton, 2004).
Excessive competition can be detrimental to the success of the industry as well. Therefore, the creation of treaties that limit the competition can work for the betterment of the industry if the practitioners and hospitals apply certain principles. The organizations within the umbrella body could have negotiated a single bundle together, then use individual initiative to contract with the third parties. Such an approach can lift the illegal claim of the Commission (Creighton, 2004). The FTC would then have considered the union as an institution working to promote the well-being of the society while improving the revenues of the industry. Fee splitting and corporate practice of medicine are general principles that institutions within the health industry employ to achieve collective decision.
FTC uses various techniques to determine the illegality or legality of an act. The per se rule allows the Commission to rule out the possibility of a good result from a certain act. For instance, any activity that involves anti-consumer practices or violates the fundamental antitrust principles becomes automatically illegal per se regardless of the intentions and the results of the actions. To achieve the per se rule, the FTC analysis ignores the examination an action as a non-competitive behavior, thus ruling it illegal without any evidence (Cooper, 2013). In dealing with health care institutions, the commission often employs the per se rule because most of these cases do not have a legal basis. However, in case the per se rule cannot hold, the FTC chooses to settle the matter through limiting the operations of the treaty to keep it within the borders of the law. The use of the per se rule allows the Commission enough flexibility to choose the right action against the accused organization or person (U.S justice department & FTC, 2009).
References
Cooper, J. (2013). The regulatory revolution at the FTC: a thirty-year perspective on competition and consumer protection. Oxford: Oxford University Press.
U.S department of justice and the Federal trade commission. (2009). Statement of antitrust enforcement policy in healthcare: Statement of Department of Justice And Federal Trade Commission Enforcement Policy On Multi-Provider Networks. (Statement 9). Department of Justice.
Creighton, S. (2004). Diagnosing Physicians-Hospital Organizations. Remarks Before The American Health Lawyers Association, Program On Legal Issues Affecting Medical Centers And Other Teaching Institutions. Washington D.C: FTC publishers.