1. Analyze the Sherman Antitrust Act, and then discuss one of the following areas of concern in health care organizations: (300 words required)
· Reduced market competition.
· Price fixing.
· Actions that bar or limit new entrants to the field.
· Preferred provider arrangements.
· Exclusive contracts.
2. Reply to the post below
The Sherman Antitrust Act was intended to “preserve free and unfettered competition as the rule of trade” for the benefit of consumers. It made monopolization and other contracts that unreasonably restrain trade illegal. It is one of three core federal antitrust laws, along with the Clayton Antitrust Act and the Federal Trade Commission Act. The Sherman Act was named for Sen. John Sherman of Ohio, who was considered an expert on regulating commerce. It was signed into law by President Benjamin Harrison on July 2, 1890 (Coryanne Hicks, 2021). Some states had already passed similar laws, but their scope was limited to intrastate business, whereas the Sherman Antitrust Act was applied across the nation.
With focus on reduced market competition the Sherman Antitrust Act plays a pivotal role in Healthcare. Competition in the healthcare industry benefits consumers because it helps contain costs, improve quality, expand choice, and encourage innovation. The Antitrust Division enforces the antitrust laws in healthcare to protect competition and to prevent anticompetitive conduct (The United States Department of Justice, 2015). Competition in this vast market ultimately will benefit consumers by containing costs, improving quality and encouraging innovation. The FTC has provided wide-ranging guidelines to health care market participants, including physicians, hospitals, pharmaceutical companies, other sellers of health care products and insurers (Kumar et al., 2019). Antitrust laws prohibit practices such as price fixing, bid rigging, market division and customer allocation.
Competition in America benefits consumers by keeping prices low and the quality and choice of goods and services high, and makes our economy work. The healthcare industry is such a large part of our economy these type of laws and regulations must be in place to ensure fair market competition for consumers. As one of two federal agencies that enforce U.S. antitrust laws, the Federal Trade Commission helps to ensure that U.S. markets are open and free. The FTC promotes competition, and challenges anticompetitive business practices and mergers, to make sure that consumers have access to quality goods and services, and businesses can compete on the merits. The FTC does not decide who wins and who loses in the marketplace – consumers do that. Rather, the FTC’s job, along with the Antitrust Division at the Department of Justice, is to make sure that businesses are competing fairly within a set of rules designed to protect competition (Federal Trade Commission, 2013).
Working with the Hospital Corporation of America for more than twenty years I am familiar with the antitrust laws and how they can impact an healthcare orginization. HCA Healthcare’s 2019 acquisition of Mission Health yielded two antitrust lawsuits against the for-profit hospital chain, filed by the city of Brevard, North Carolina (Muoio, 2022). Although HCA was able to aquire 90% of the acute care market share over 90% of physicians and staff left Mission Health after the aquisition but HCA still managed to profit over $59 billion in total revenue and still operate over 180 facilities in the United States. As the largest hospital chain in the United States many hospital chains are finding ways to leverage mergers, aquisitions, alliances, and partnerships to their advantage while maintaining their competive advantage.
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