David Christie, November 13, 2015
Conference Opening: Welcome from Dean Robert Post
Robert Post, the Dean of Yale Law School, opened the conference by thanking everyone for attending the launch of the new Solomon Center for Health Law and Policy at Yale Law School the previous day. Dean Post noted that the goal of the Center is to create a space to explore an under-studied industry within the legal academy. He observed that while “these are issues of immense consequence, they are issues that remain poorly understood.” Today’s conference is meant to begin the important work of better understanding these issues. Yet as Dean Post overserved, “this conference is meant to provide more than mere intellectual stimulation – we want to inspire ideas and positive change within the industry.”
Opening Remarks: Assistant Attorney General William Baer
William Baer, Assistant Attorney General for the U.S. Department of Justice (DOJ)’s Antitrust Division, spoke next. Before joining DOJ in 2013, Assistant AG Baer was the head of the Antitrust Practice Group at Arnold & Porter LLP. He also previously served as the Director of the Bureau of Competition at the Federal Trade Commission (FTC).
Assistant AG Baer spoke from the DOJ’s headquarters in Washington, DC, where the Antitrust Division is celebrating the 125th anniversary of the Sherman Act. Baer began by discussing the impact of the ACA on healthcare antitrust. He noted that the “ACA is premised on the idea that consumers benefit from robust competition.” This is true of competition between insurance plans: “research confirms what common sense tells us, that consumers pay lower prices in markets with more competition among insurance plans.” Baer’s comments came as the DOJ is evaluating several proposed mergers between several of the nation’s largest health insurance companies. Said Baer, “while the ACA promotes collaboration, it does not – and was not meant to – give companies a free pass on antitrust scrutiny.”
Baer also noted that the Antitrust Division has blocked several hospital mergers in recent years. He said that merger enforcement will continue to be a priority for DOJ going forward, and outlined the criteria that the Antitrust Division uses to examine hospital mergers. Said Baer, “it is not at all clear that consumers win when mergers are related entirely to creating bargaining leverage power.” Instead, consumers gain when the market has competition, through lower prices, higher quality, and greater innovation.
Baer closed by briefly discussing how the DOJ works with state antitrust enforcers, praising the work of the next speaker, Massachusetts Attorney General Maura Healey.
Opening Remarks: Attorney General Maura Healey
Maura Healey was elected Attorney General for Massachusetts in November 2014. Healey had previously worked in the Massachusetts AG’s office for several years, including as head of the Civil Rights Division. Healey was a partner in the Boston office of WilmerHale before joining the AG’s office.
AG Healey began by echoing Baer on the importance of working across levels of government to address antitrust concerns. She described this relationship as cooperative and collaborative in ways that benefit consumers. According to Healey, the federal government has more resources to pursue antitrust issues, while state antitrust offices can provide more of a perspective from the front lines about the realities for consumers and regulated entities on the ground.
Healey noted that issues of healthcare costs and quality have been central to the work of the Massachusetts AG’s office for a number of years. Massachusetts has long been a leader in the health care arena, including its role as the first state to offer universal health insurance coverage. Since her election, Healey has doubled down on the AG’s health care focus, internally reorganizing to create a Health Care and Fair Competition Bureau. The new Bureau uses a variety of tools that the state legislature has given to the AG to help provide additional cost and quality transparency and to help analyze new initiatives and market participants.
In her remarks, Healey addressed the conference’s broader theme: consolidation. She observed that there are a wide variety of concerns to consider every time a merger is proposed, some of which are subtle. Hospitals are major economic drivers within communities, and often significant employers. When mergers come up, local communities are concerned about potential job losses and the potential to lose control over their local care facility. Healey also noted that since many hospitals are non-profits, issues arise when they merge re: the use of charitable assets that have been built up through the years from the community.
Healey provided an example of one major issue her office dealt with recently: Partners Healthcare’s proposed acquisition of Harbor Medical Associates. The AG’s Antitrust Division operates with the goal of preserving competition to help consumers access affordable care. The merger was challenged, and the court – after hearing public comments from experts around the state – asked the AG’s office to weigh in. Healey’s office responded that if the judge rejected the proposed settlement, the office was prepared to litigate to stop the deal from going forward. The AG’s office added that it was interested in seeing if Partners could lower costs first within its existing structure before applying those savings to the new entity. This theme of “prove it, not just project it” has become a principle that the AG’s office has begun to apply more broadly. The court ultimately rejected the proposed Partners agreement, and the entities decided to forgo the proposed merger.
Healey closed by predicting that she these issues will become more prevalent going forward.