•  
  •  
 

UC Law Journal

Abstract

As healthcare markets continue to consolidate and prices continue to rise, economists, legal scholars, antitrust enforcers, and policymakers have the opportunity and the obligation to examine how the dynamics of our healthcare markets have changed over time and how those changes affect consumers and competition. Although antitrust merger law is designed to arrest anticompetitive harms in their incipiency, it has failed to prevent anticompetitive consolidation in most sectors of the healthcare industry. Of particular concern is the inattention of antitrust enforcers to the growing market power of healthcare systems that span multiple local geographic markets. While more than half of all hospital mergers have occurred across geographic markets in the last decade, none have been challenged in federal court. Emerging economic data suggest that these mergers can result in price increases for hospitals throughout the newly merged systems, and a number of cases document the propensity of hospital systems to exercise postmerger market power. To accurately reflect the expanding body of knowledge surrounding price and market power in healthcare transactions, the traditional tools of antitrust enforcement must be seen with new eyes. This Article argues that cross-market healthcare transactions can lead to increased prices through a variety of mechanisms and provides a framework for analyzing which mergers may raise competition concerns. Our hope is that this framework will encourage economists, legal scholars, and antitrust enforcers to work collaboratively to identify and restrict the growth of “system power” resulting from anticompetitive cross-market healthcare mergers.

Download

Included in

Law Commons

Share

COinS