Question

Analyze the Sherman Antitrust Act, and then discuss one of the following areas of concern in health care organizations:

• Reduced market competition.
• Price fixing.
• Actions that bar or limit new entrants to the field.
• Preferred provider arrangements.
• Exclusive contracts.

Answer 1

SHERMAN ANTI TRUST ACT

• The to control certain key industriesantitrust act is landmark 1890 U.S legislation that outlawed trusts- groups of businesses that teamup or form a monopoly in order to dictate pricing in particualr market
• The act's purpose was to promote economic fairness and competitiveness and to regulate interstate commerce.
• The Sherman antitrust act was the first attempt by the united states congress to address the use of trust as a tool that enables a limites number of individuals

REDUCED MARKET COMPETITION

• Competition in healtrh care markrets benefits consumers because it helps contain costs, improve quality and encourage innovation
• The federal trade commission;'s job as a law enforcer is to stop firms from engaging in anticompetitive conduct that harms consumers
• The commission and its staff undertake a variety of other activities to promote competition in health care.
• One key area is research and reports on competition issues in health care .
• Another broad area of activity is competition advocacy

PRICE FIXING

• Price fixing is an agreement among competitors that raises, lowers or stabilizes prices or competitive terms.
• Generally the antitrust require that each company establish prices and other terms on its own, without agreeing with a competitor.
• When competitors agree to restrict competition, the result is often higher prices.
• Accordingly, price fixing is a major concern of government antitrust enforcement.
• A plain agreement among competitors to fix prices is almost always illegal, whether prices are fixed at a minimum, maximum or within some range.

EXCLUSIVE CONTRACT

• An exclusive contract is an arrangement where one firm agrees to do business with another firm, but nobody else
• Exclusive contracts are generally considered to be good for physicians who have them and bad for those excluded by them.
• These agreements can also raise issues under the stark ll physician are in a position to refer medicare or medical patients to the hospital