Health Merger Guidelines Eased Government Removes Some Antitrust Obstacles That Deter Physician Joint Ventures

Doctors and hospitals were told Wednesday that the federal government would be more flexible in allowing them to form mergers and joint ventures without violating antitrust laws.

The American Medical Association predicted that the revised antitrust guidelines would result in more choice for patients, more competition and better health care for consumers.

The revisions were prepared and issued jointly by the Federal Trade Commission and the Justice Department - the two agencies responsible for protecting the marketplace from unfair competition.

In 141 pages, the guidelines explain how the two agencies will apply the antitrust laws in their reviews of networks of doctors and multiprovider networks, which offer more than basic medical services.

The most important change makes clear that a broader range of such doctor-controlled networks will be allowed under the law, FTC Chairman Robert Pitofsky said at a news conference.

Another change related to rural areas explains that certain health care arrangements that might raise antitrust concerns elsewhere in the country may be justified by the market conditions in farm areas.

Further, the agencies will look favorably upon networks in which doctors work together to keep costs down and provide high-quality care, even though they may not share the financial risk of the venture, Pitofsky said.

Pitofsky said the new guidelines were intended to “make clearer the circumstances under which doctor networks are entitled to more flexible antitrust treatment.”

The two agencies issued their first guidelines in 1993, when the health care industry was swept by a wave of hospital mergers and partnerships among doctors. The guidelines were updated in 1994.

But hospital and doctor groups continued to complain that fears of running afoul of antitrust laws have deterred mergers and innovative business arrangements that could improve care and save consumers money.

Anne K. Bingaman, assistant attorney general in charge of the Justice Department’s antitrust section, said the changes would encourage such activity between and among doctors and hospitals.

“That’s what we’ve been told,” she said at a news conference. “We’ll see what happens. Our job is to keep the market competitive.”

Daniel Johnson, president of the American Medical Association, said the revisions would result in “more choice for patients, more competition and better health care” for consumers overall.

He said they also marked a “significant step forward in ending the discrimination of prior agency policies against physician joint ventures.”