A couple of weeks back, I wrote that “I don’t see a non-wonk constituency pushing for the intensity of antitrust enforcement that’s needed” to tackle the growing market power of hospital systems. I heard from a former student and antitrust expert, who had this to say (he asked me to keep his name out of it):
I agree with the general premise with a slight deviation. There’s been a lot of attention paid to antitrust in this election from the populist wings of both parties (e.g., the public commentary regarding the AT&T/Time Warner announcement). However, a lot of the frustration is misplaced by focusing on large conglomerate mergers or vertical mergers where the anticompetitive effects may be muted. There needs to be more attention paid to smaller—and more frequent—deals that don’t get the national press coverage.
In an email back to him, I bemoaned the lack of state enforcement. States have antitrust laws, too. Why don’t they take the lead given that hospital markets are geographically confined? He replied:
I’ve been equally surprised by the lack of independent state-level antitrust enforcement. Beyond mergers, issues like market allocation and price fixing among hospitals and/or independent practices deserve more scrutiny than they’ve otherwise received. State AGs will often piggyback on FTC cases … [because] they just don’t have the resources or technical know-how to bring independent actions. Most of the states combine their antitrust and consumer protection functions in a single, small office, and focus on the latter mission at the expense of the former.
Perhaps too cynically, I also think state AGs are generally biding their time till they can run for governor or a Senate seat; angering major employers/corporations by blocking their mergers cuts into their potential contributions. And I suspect the interest level in state-level merger control is sensitive to industries to a greater degree than is federal antitrust. There’s a great empirical political economy dissertation to be written on the effects of political contributions and industry on state-level antitrust enforcement.
Depending on what the Trump administration does, all that could change. I don’t take see Trump’s comments on the AT&T/Time Warner deal as a pro-antitrust enforcement posture. It’s more likely he’s willing to take on media and telecom conglomerates and is generally antagonistic or agnostic towards antitrust beyond that narrow field. States may have to pick up the mantle.
When it comes to hospital consolidation, it seems that federal antitrust enforcers can’t and state antitrust enforcers won’t.