Managed Care and Monopoly Power: The Antitrust Challenge

251 Pages·2003·0.58 MB·English

by  Deborah Haas-Wilson

MANAGED CARE AND
MONOPOLY POWER

Managed Care and
Monopoly Power
THE ANTITRUST CHALLENGE
Deborah Haas-Wilson
HARVARD UNIVERSITY PRESS
Cambridge,Massachusetts
London,England 2003
Copyright©2003bythePresidentandFellowsofHarvardCollege
Allrightsreserved
PrintedintheUnitedStatesofAmerica
LibraryofCongressCataloging-in-PublicationData
Managedcareandmonopolypower : theantitrustchallenge /
DeborahHaas-Wilson.
p. cm.
Includesbibliographicalreferencesandindex.
ISBN0-674-01052-3(alk.paper)
1.Medicalcare—UnitedStates. 2.Medicaleconomies—UnitedStates.
3.Managedcareplans(Medicalcare)—UnitedStates. 4.Monopolies.
RA395.A3M3555 2003
362.1(cid:2).0973—dc21 2003041694
Tomyfather,WalterM.HaasJr.,
andinmemoryofmymother,CarolAnnHaas

Acknowledgments
I wish to acknowledge with gratitude the financial support of the
Robert Wood Johnson Foundation through its Investigator Awards in
HealthPolicyResearchProgramandthepersonalencouragementand
supportofBarbaraKivimaeKrimgold,theformerDeputyDirectorof
theprogram.
Iamespeciallygratefultotwoanonymousreviewerswhogenerously
shared their expertise with me and thus greatly improved the manu-
script. In addition, Randy Bartlett and Roger Kaufman, friends and
colleaguesatSmithCollege,readanearlierversionofthemanuscript,
gavehelpfulcomments,andaskedthought-provokingquestions.
Discussions and conversations with attorneys practicing in health
care markets were also extremely productive. I am grateful to Bob
Bloch, Jesse Caplan, Pam Cole, Eugene Crew, Mark Jansen, Chris
Kellner, Bob Leibenluft, Tom Reilly, and Jerre Swann. I also wish
to acknowledge Martin Gaynor for many extensive discussions that
helpedtoframemuchofthematerialinChapters6and7.Inaddition,
I gained valuable information and important leads in conversations
with Bob Berenson, Mark Butti, Kenneth Danger, David Dranove,
Roger Feldman, Ted Frech, Ruth Given, Lee Mobley, Michael
Morrisey, Paul Paulter, Jamie Robinson, Bill Sage, Richard Scheffler,
SaraThran,GregVistnes,andKathrynWilber.Thereferencelibrari-
viii Acknowledgments
ansatNeilsonLibrary,especiallySikaBerger,werealsoveryhelpfulin
locatinginformationandthemostup-to-datestatistics.
The editors at Harvard University Press have been extremely
helpful.MichaelAronsonwasapatientandperceptiveeditorthrough-
outthesix-yearprocessofwritingthisbook.MaryEllenGeer’sedito-
rialworkgreatlyimprovedthereadabilityofthemanuscript.
Withoutmyfamilyandfriends,thisbookwouldhaveneverseenthe
light of day. I will be forever thankful for their love, understanding,
perspective, generosity, and encouragement. The example my mother
setinherlifetimegavemethecouragetostartthisbook,andthenafter
herdeathtofinishit.Myhusband’slove,encouragement,andgeneros-
ity gave me strength, especially when the going got rough. My chil-
dren, Carrie and Matthew, were extraordinarily understanding about
thehoursIspentwriting.Matthew’squestions(Howmanypageshave
you written? Isn’t the book long enough yet?) helped to keep me fo-
cused on what is most important. The many times Carrie volunteered
to cook dinner made me realize she truly understands the meaning of
family. My father carefully read many chapters, offered valuable sug-
gestions, and spent a day thinking of possible titles, including the one
on the front cover. My mother-in-law even got involved with format-
tingthenotes.
I think Paul McCartney and John Lennon said it best, albeit with
oneneededaddition:“Igetbywithalittlehelpfrommyfriends”—and
family.
Contents
Introduction 1
1 TheTransformationoftheHealthCareSystem 10
2 TheCurrentTreatment:
AStrongDoseofCompetition 36
3 AntitrustPolicyinHealthCareMarkets 65
4 MarketDefinitioninHealthCareAntitrust
CasesInvolvingConsolidation 90
5 EntryBarriersinHealthCareMarkets 127
6 TheEffectsofHorizontalConsolidationamong
Hospitals,Physicians,orInsurers 140
7 TheEffectsofVerticalConsolidationin
HealthCareMarkets 161
Conclusion 184
Notes 193
IndexofOrganizations 233
SubjectIndex 235