Anti-Trust Protection May Be Saved Lawmakers, Insurers Reach Compromise On Joint Ventures In Health Care

Spokane health care providers could keep working toward consolidation under a legislative compromise in the works in Olympia.

The bill, ESHB1589, would grant immunity from state anti-trust laws for providers that want to collaborate, if it serves the public interest.

Under a compromise negotiated with insurers, Gov. Mike Lowry and state lawmakers, providers already setting up collaborative arrangements would be allowed to proceed with their plans.

A moratorium on any new collaborations would be in effect as of the date the bill is signed, and remain in effect until July 1, 1996.

Meanwhile, the state attorney general’s office will examine consumer, business and legal questions involved in allowing such collaborations, and report back to the 1996 Legislature.

Spokane lawmakers said the bill will help consumers by allowing providers to pool resources for better service.

Collaborations would have to be approved by the state attorney general’s office and a state health services advisory board.

“Providers are prohibited from working together normally under anti-trust provisions, but in reality, they need to work together to provide adequate care in some parts of the state, including Eastern Washington,” said Rep. Dennis Dellwo, D-Spokane, who helped negotiate the agreement.

The compromise, expected to be approved this weekend by the Legislature, is good news for Spokane hospital leaders hoping to band together to keep outsiders from taking away their patients.

Sacred Heart, Deaconess and Valley medical centers, and Holy Family Hospital, are discussing a joint venture designed to cut costs.

Without the compromise, rural hospitals and doctors also hoping to join ranks would have been blocked by anti-trust laws.

Partnerships already in the works would have been thrown into court.

The Health Services Act of 1993 provided the anti-trust immunity needed for such deals to get off the ground, but the Legislature pulled the rug out from under them by repealing the 1993 act this session.

Consumer advocates didn’t give the compromise a clean bill of health. They warned that while collaboration can foster better service, it can also allow providers to fix prices and kill off competition essential to protect customers.

“It’s a real mixed bag,” said Michael Casey, an anti-trust attorney in Spokane. “The concept is good, with safeguards.

“Do we have the appearance of a beneficial merger or is it just a price-fixing scheme, a monopoly in disguise?”

Now that the Health Services Commission has been repealed, Casey wondered if the state has provided an adequate watchdog for consumers.

The health advisory board created in its place does not have the same independent rule-making authority.

Pete McGough, president of the state medical association, said the deal will help patients.

If they can band together, providers will have more power in their negotiations with insurance companies.

“If everyone has to be a small, independent entity, insurers can just play one off against another,” McGough said.

That restricts consumer choice by putting providers and health care services out of business, McGough said.