American Health Lawyers Association and ABA Antitrust Section Antitrust in Healthcare Conference

Transcription

1 American Health Lawyers Association and ABA Antitrust Section Antitrust in Healthcare Conference Antitrust and Healthcare Information Technology: Competing or Complementary Goals? Anthony W. Swisher Squire Sanders (US) LLP Washington, DC April 2014 The development and adoption of health information technology, or HIT, is growing at an astounding pace. Driven both by market forces and by government encouragement, the HIT industry offers new technologies that promise to revolutionize medicine from data storage to payment functions, and to change the way physicians practice and the way patients access healthcare. Undoubtedly contributing to the expansion of HIT is the government s policy to encourage the broad adoption of technology as a tool to reduce healthcare costs. Through statutes such as the Health Information Technology for Economic and Clinical Health (HITECH) Act and the Affordable Care Act, the government is actively encouraging healthcare industry participants to expand their use of technology. Federal and state health insurance exchanges provide electronic marketplaces that facilitate the purchase of health insurance. Federal meaningful use reimbursement incentives promote the adoption by physicians of electronic medical records, or EMR. The HITECH Act mandates the development of a nationwide health information technology infrastructure to promote a more effective marketplace, greater competition... [and]

2 increased consumer choice. 1 The Department of Health and Human Services has a National Coordinator for Health Information Technology, whose role is to support the adoption of health information technology and the promotion of nationwide health information exchange to improve health care. 2 This drive towards technology adoption is just part of a larger movement in the healthcare industry towards reducing costs and improving outcomes. Again reflecting a combination of market forces and government encouragement, healthcare payers and providers are working often collaboratively to enhance efficiency and lower costs, all while improving patient care. A prime example is the Medicare Shared Savings Program, which encourages the development of Accountable Care Organizations (ACOs) essentially collaborations among providers and hospitals to facilitate coordination and cooperation among providers to improve the quality of care for Medicare Fee For Service (FFS) beneficiaries and reduce unnecessary costs. 3 Given the federal government s related policy priorities of encouraging the broad adoption of HIT, reducing healthcare costs and improving quality, it would be tempting to think that government antitrust enforcement might be relaxed in areas where the government s priorities are seemingly competing. To date, however, the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ) have consistently taken the position both in speeches and in enforcement matters that the goal of promoting better healthcare does not compete 1 HITECH Act, 3001(b). 2 onc. 3 Fee for Service Payment/sharedsavingsprogram/index.html?redirect=/. 2

3 with a healthy antitrust enforcement regime, but is fully consistent with it. For example, in a recent speech, FTC Commissioner Brill drew a particularly strong correlation between the goals of improved healthcare generally as embodied in the Affordable Care Act and the antitrust laws. Indeed, far from being a barrier to procompetitive collaboration envisioned in the ACA, antitrust aligns naturally with the goals of ACOs. By serving as a watchdog against anticompetitive conduct, antitrust promotes market behavior that creates efficiencies and benefits consumers. 4 Similarly, in litigation matters courts have not yet been willing to credit improved care and patient outcomes as a reason to apply a looser antitrust standard. For example, in FTC v. St. Luke s Health System, the court explicitly found the proposed acquisition by St. Luke s Hospital System of the Saltzer physician group was intended by St. Luke s and Saltzer primarily to improve patient outcomes. 5 The court even found that the acquisition would have that effect if left intact, and applauded St. Luke s for its efforts to improve the delivery of health care in the Treasure Valley. 6 Despite the demonstrable care improvements flowing from the deal, the court nonetheless struck it down under 7 of the Clayton Act, finding that the acquisition creates a substantial risk of anticompetitive price increases that was not offset by the benefits the deal would provide. 7 4 Promoting Health Competition in Health Care Markets: Antitrust, the ACA, and ACOs, Keynote Address by Julie Brill, Commissioner, Federal Trade Commission before the 2013 National Summit on Provider Market Power, Catalyst For Payment Reform, June 11, 2013, Washington, DC, available at healthy competitionhealth care markets antitrust aca and acos/130611cprspeech.pdf. 5 FTC v. St. Luke s Health System, et al., Case No. 1:13 CV BLW (Jan. 24, 2014), Findings of Fact and Conclusions of Law, slip op. at 3. 6 Id. 7 Id. at 51. 3

4 The enforcement agencies have not yet had as much opportunity to grapple with antitrust enforcement specific to HIT, but given their enforcement efforts in the healthcare sector generally, it stands to reason that government encouragement of greater HIT adoption will not be a barrier to continued aggressive antitrust enforcement. And antitrust enforcers have offered hints that they will not be afraid to tackle HIT markets in the right circumstances. According to a recent speech by Commissioner Olhausen, the FTC should use its flexible and fact intensive approach to antitrust enforcement to investigate and, where appropriate, challenge competitive harms occurring in health care, technology, and even health care technology. 8 What are some of the antitrust issues that could arise as HIT is developed and adopted? The history of antitrust enforcement in other technology markets may provide some guidance. 9 Certainly, where a technology firm obtains a substantial position in a relevant market, the DOJ has not been hesitant to use Sherman Act 2 as a tool. The case against Microsoft demonstrates that when antitrust enforcers think they can prove market power and exclusionary conduct they will not hesitate just because the industry involved is in the fast paced technology sector. The agencies have also demonstrated a willingness to use 1 of the Sherman Act against technology companies 8 Health Care, Technology, and Health Care Technology: Promoting Competition and Protecting Innovation, Remarks of Maureen K. Ohlhausen, Commissioner, Federal Trade Commission before The Connecticut Bar Association Antitrust & Trade Regulation and Consumer Law Sections, Hartford, Connecticut, February 26, 2014, at p. 18, available at pdf. 9 See generally Mark Botti and Anthony Swisher, Health Information Technology and Antitrust: Those Who Forget the Past Are Destined to Repeat It, 104 ATRR 250 (Feb. 22, 2013), available at information technology and antitrust those who forget the past aredestined to repeat it//. 4

5 where the facts warrant. The DOJ s suit against Apple alleging participation in a horizontal conspiracy among book publishers to raise the price of e books is a very recent example. And as the development of intellectual property continues to expand, so too does the use of IP as a competitive weapon, leading to antitrust disputes and government enforcement. The FTC s aggressive litigation of reverse payment cases, its history of challenging patent hold ups in standard setting organizations, and its more recent focus on patent assertion entities all lead to the conclusion that government enforcement at the intersection of antitrust and intellectual property will continue apace. In general, as in healthcare and technology cases that have come before, the antitrust enforcement agencies will continue to challenge the exercise of market power and efforts to stifle competition or thwart innovation. While the FTC and DOJ may not allow antitrust enforcement to take a back seat to the government s policy goal of improving healthcare, it is nonetheless important to remember that the H in HIT stands for healthcare. Clinical quality may not trump antitrust, but it remains an important factor that enforcers and courts will take into consideration when evaluating the merits of a transaction or the competitive effects of particular conduct. Moreover, in an environment in which rising healthcare costs are continually in the news and the government has very publicly weighed in with efforts to bring them under control, the cost saving and efficiency enhancing promise of HIT will undoubtedly be an important factor in future enforcement decisions. So while the goals of better, lower cost healthcare and antitrust enforcement may not necessarily be incompatible, context still matters. HIT s potential to, for example, streamline 5

6 administrative processes, reduce medical errors, or contribute to population health management will be important factors that the antitrust enforcement agencies and the courts will need to consider when weighing whether antitrust enforcement might unnecessarily hinder important technological developments. 6