April 02, 2004

Does business sabotage tort reform?

Regarding Yale law professor George Priest's comments on the ruthlessness of businesses as antitrust plaintiffs (Mar. 17): I work in antitrust policy, and I can attest to the fact businesses are the major barrier to significant reform. One quick example: For the past few years, the Federal Trade Commission has enforced a policy (made up by them) prohibiting physicians from exchanging information with one another about contract offers from managed care payers unless certain conditions are met. In other words, physicians may not join with each other to respond to an HMO's contract offer without the FTC's permission. This policy benefits the HMOs, but it hurts physicians and their patients. The HMOs basically run to the FTC anytime a group of physicians rejects one of their contract offers. The FTC labels this behavior "cartel-like" and punishes the doctors accordingly.

The kicker is, large businesses tacitly support this policy because it keeps the cost of physician services artificially low, which in turn (they think) keeps their health insurance costs lower. -- Skip Oliva, Citizens for Voluntary Trade, Washington, D.C.

Posted by Walter Olson at April 2, 2004 12:27 AM
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