Look Out: FTC Examines Competition in Health Care

If you’re in health care management, you may start to wish that your MBA in health administration had included a course in managing frustration — yours.

Health care executives will need to recognize that competition will continue to become more broadly-based.

With all the scrutiny that the industry gets from the Department of Health and Human Services and the Food and Drug Administration, you’d think that management teams would be at peace with regulatory compliance. However, the Federal Trade Commission is reasserting authority with a recent public workshop in competition. Health care providers have had enough other things to worry about, but that is likely to change.

Here is the agency’s view:

Competition in health care markets 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 agency also provides guidance to market participants — including physicians and other health professionals, hospitals and other institutional providers, pharmaceutical companies and other sellers of health care products, and insurers — to help them comply with the nation’s antitrust laws.

And here are some of the 50 questions the FTC posed for the workshop, with a strong emphasis on services from non-traditional sources:

  • “Is there evidence that quality of care is improved when professional regulations are narrowly tailored to protect patient safety while facilitating greater deployment of non-physician or non-dentist health care professionals?”
  • “To what extent might professional regulations unnecessarily restrict the scope of practice of non-physician or non-dentist health care professionals?”
  • “How do current regulations concerning licensure and credentialing affect the ability of health care professionals to relocate or practice in more than one geographic area, particularly across state lines?”
  • “What are the competitive implications of the increased use of retail clinics on the supply of services, cost, quality, and access to care?”
  • “What policies could further technical innovation conducive to effective and efficient telemedicine?”
  • “To what extent are information technology vendors and health care providers sharing patient health information? Are there significant impediments to the useful flow of patient health information to improve health care coordination and quality?”

    The questions along show the FTC’s interest in encouraging viable new types of health care and preventing the possibility of anti-competitive behavior. In a January case, the a unanimous FTC pushed its right “to protect consumers from harmful business practices in the increasingly important field of data security,” even when involving a health care provider already covered by HIPAA. Some at the workshop urged the FTC to see whether electronic health care records had become a tool that enabled some hospitals to limit competition.

    Health care executives will need to recognize that competition will continue to become more broadly-based. Trying to freeze out others will only increase the glare of attention, and increase the chance of administrative actions and fines. That is why advanced training in business as practiced in the industry continues to become a greater requirement. Those in the industry need to master marketing, strategic planning, and data analysis to understand how to effectively compete without taking actions that could invite unwanted and unproductive attention.