FTC Chairman Tells House Judiciary Committee Doctor Collective Bargaining Bill Would Be Bad Medicine for Consumers

Federal Trade Commission Chairman Robert Pitofsky today told the House Judiciary Committee that a proposed antitrust exemption to allow physicians and other health care professionals to engage in collective bargaining with health plans would be bad medicine for consumers. "Without antitrust enforcement to block price fixing and boycotts designed to increase health plan payments to health care professionals, we can expect prices for health care services to rise substantially," the Chairman said. "By raising health care costs and making health insurance less affordable, the exemption threatens to increase the number of uninsured and thus reduce access to care," he added.

While the testimony notes that there are serious problems concerning the relationship of health plans to doctors and patients that deserve to be addressed, the Commission said that this proposal is the wrong approach. The testimony outlines various proposals for health system reform that do not recommend antitrust immunity or collective bargaining rights for providers.

The testimony referred to the record of antitrust law enforcement cases over the past two decades to underscore the types of activities the bill would legalize. It outlined how the proposal, H.R. 1304, the "Quality Health-Care Coalition Act of 1999," would cause serious harm to consumers, to employers, and to federal, state, and local governments:

• Doctors and other health care professionals could join together to demand substantially higher fees.
• Pharmacists could insist on higher payments for filling prescriptions.
• Consumers and employers, including government employers, would face higher insurance premiums.
• Consumers would pay more out-of-pocket.
• Medicaid programs that provide services through managed care plans could be forced to increase their budgets or reduce services.
• The number of uninsured Americans, and the costs borne by state and local governments in providing for their care, could increase significantly.

The testimony also states that H.R. 1304, while styled as a labor exemption, "has little to do with established labor law and policy." The labor exemption already applies to health care professionals, but it is limited to employers and employees, and does not protect combinations of independent business people, the Commission said. Moreover, the testimony stated, the labor laws were designed to permit workers to obtain better wages and working conditions, not to affect the quality of goods or services received by consumers. While the stated purpose of the bill is to improve the quality of patient care, the bill offers no assurance that improved care would result.

Pitofsky discussed the concern often raised that antitrust laws prevent physicians from being effective advocates for their patient, or from discussing issues relating to patient care among themselves or with health plans. "This is simply not the case," he said. "Health care professionals can and do engage in collective advocacy, both to promote interests of their patients and to express their opinion about other issues ... The antitrust laws do not prohibit medical societies and other groups from engaging in collective discussions with health plans regarding issues of patient care," the testimony states.

Pitofsky concluded his remarks by stating that "there are no easy solutions to the problems inherent in the simultaneous pursuit of cost effectiveness, high quality, and wider access to health care services. But allowing doctors and other health care practitioners to fix prices and other contract terms is not the answer. The Commission continues to believe that competition among health care providers and among health plans is an important tool for controlling costs, providing consumer choice, and promoting innovation and high quality," he said.

The Commission vote to authorize the testimony was 4-0.

Copies of the Commission testimony are available from the FTC's web site at: http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

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