White House Gets FTC to Heel
It's been several months since the Patient Protection and Affordable Care Act, otherwise known as health reform, was passed by Congress. It was President Obama's key legislative achievement and was trumpeted from the halls as a new era in healthcare. Yet some of its key provisions, including the encouragement of healthcare providers to band together to improve the quality and continuity of care, seemed to directly conflict with the Federal Trade Commission's targeting of hospitals and health systems in antitrust actions.
The conflict was especially troubling if one entity wanted to own all these parts and pieces. Essentially, you had the government telling hospitals and health systems to band together on one hand, and threatening them with punishment for that action with the other hand.
I've talked to numerous CEOs about this issue in informal conversations since health reform legislation was passed, and none really had an answer for how this dichotomy might be addressed. They did, however, privately acknowledge it was a problem. Roughly six months later, we have our answer—and it's a big flip-flop from where we were only a month or so ago.
A couple of days ago, the FTC finally spoke. The upshot: They're looking for ways to relax its enforcement of antitrust actions against healthcare providers in order to facilitate the formation of so-called accountable care organizations. But what took so long? In a climate in which an industry already hidebound by regulation is facing such drastic changes—from structures of care to reimbursement—time is of the essence.
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