FTC Staff Submits Comments on Establishing Collective Bargaining for Independent Home Care Providers in Ohio

Commission approval of staff comments: At his request, staff of the FTC’s Office of Policy Planning, Bureau of Competition, and Bureau of Economics have submitted comments to Ohio State Senator William J. Seitz regarding Ohio Executive Order 2007 – 23S, issued by Governor Ted Strickland in July 2007 and entitled “Establishing Collective Bargaining for Home Health Care Workers.” The order seeks to establish collective bargaining for independent home health care providers (IHCPs), defined as “those providers of ongoing Medicaid reimbursed direct care services that are paid for through a Medicaid waiver program in the State of Ohio and not employed by a private agency.”

The order stipulates state recognition of “one representative as the exclusive collective bargaining representative for all IHCPs,” and that “the State, acting through the Office of the Governor or his designee, shall engage in collective bargaining with the elected representative of IHCPs regarding reimbursement rates, benefits, and other terms.” In his request for comments, State Senator Seitz asked whether, among other things, the executive order is liable to create competition problems because it confers collective bargaining power on some health care providers and not others, and whether the “unionization of small business owners who contract with the state...under the Medicaid program violates antitrust laws.”

As detailed in the comments, the FTC staff believes the executive order is likely to foster certain anticompetitive conduct that is inconsistent with federal antitrust policy, and that such conduct could work to the detriment of Ohio home health care consumers. This is because the order endorses private anticompetitive conduct, in that it would permit competing providers to agree on the prices they would accept for their services – which amounts to per se price fixing. In addition, although the order addresses bargaining related to Medicaid reimbursement only, the staff expresses concerns that its anti-consumer effects are liable to spill over into other segments of the market for home health care services. Accordingly, it poses the risk of both higher prices and reduced competition, with no assurance of improvements in consumers’ quality of care.

The Commission vote approving issuance of the staff comments was 4-1, with Commissioner Jon Leibowitz voting no and issuing a dissenting statement. They were transmitted to State Senator Seitz on February 14, 2008. Copies of the comments, and Commissioner Leibowitz’s dissenting statement, can be found on the FTC’s Web site and as a link to this press release. (FTC File No. V080001; the staff contact is Daniel J. Gilman, Office of Policy Planning, 202-326-3136.)

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.