FTC Staff Comment Says Bills to Authorize Collective Bargaining by Minnesota Health Care Cooperatives will Raise Health Care Costs for Minnesota Consumers

According to the staff of the Federal Trade Commission, legislation pending before the Minnesota legislature that seeks to exempt certain activities by Minnesota health care cooperatives from federal and state antitrust law likely would raise health care costs and reduce insurance coverage for Minnesota consumers. The FTC’s Bureau of Competition, Bureau of Economics, and Office of Policy Planning yesterday filed a detailed comment with Minnesota State Representative Tom Emmer, responding to his request for the FTC’s views on Minnesota House Bill H.F. No. 120 and its companion legislation, Senate Bill S.F. No. 203.

The FTC staff comment observes that the bills appear to authorize anticompetitive activities, including price fixing and concerted refusals by the cooperatives and their members to deal with health plans and other purchasers. According to the comment, “Nothing in the bills is likely to prevent the harmful effects that arise from immunizing price fixing . . . [and] these bills would deprive health care consumers of the protections of the antitrust laws and the benefits of competition.”

Specifically, the comment states that “the bills, if enacted, would harm Minnesota consumers through higher prices for health care services, higher insurance premiums, lower levels of insurance coverage, and lower wages. All Minnesota taxpayers, moreover, would likely bear the burden of this proposal, as state-sponsored insurance programs would have to pay more to provide coverage for the most vulnerable segments of the population.”

The comment also explained that an antitrust exemption is unnecessary to improve health care quality and that the bills may not succeed in immunizing “health care cooperatives from liability for conduct that violates federal law.”

The Commission vote to approve the filing of the staff’s comment was 4-0. The comment was transmitted on March 18, 2009, and can be found as a link to this press release on the FTC’s Web site. The FTC staff also is conducting an investigation of the Minnesota Rural
Health Cooperative, a health care cooperative operating in Minnesota. (FTC File No. V090003; the staff contact is Markus Meier at 202-326-3759.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 15.2009.wpd)