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Anti-trust laws may be unhealthy.

Is competition the Rx for skyrocketing health care costs?

Not according to one Colorado lawmaker who wants to skirt anti-trust laws so hospitals can create cooperative partnerships. And he is not alone in this endeavor.

Several states have recently enacted legislation exempting hospitals and health care organizations from state and federal anti-trust laws intended to encourage competition by preventing collusion and price fixing. Patients will reap the benefits.

"In our heart of hearts, in the capitalistic view, we want to say that competition among all parties is the only thing that can ensure good health care," says Colorado Senator Tom Blickensderfer. "But competition on all fronts, on all issues, leaves an awful lot of machinery and staff either unused or extraneous. It all still has to be paid for, and it is the patient who pays the bill."

Blickensderfer set about to remedy that situation. The result was passage of Colorado Senate Bill 120 that allows hospitals to enter into cooperative partnerships without violating anti-trust laws. The law establishes an 11-member board and state oversight of hospital agreements.

Pointing out that there were more magnetic resonance imagery machines (MRIs) in the Denver area than in the entire nation of Canada and that each one is expensive, Blickensderfer says that under the new law hospitals will be able to cut back on their capital outlay and share use of machines.

"The race to be competitive on all fronts requires enormous capital and personnel expenditures," he says. "[Now] hospitals can enter into some of these ventures as partners and cut costs."

The law will also prove a boon to rural areas of the state that often lack services, since it allows sharing of resources. "The one area that comes to mind right away is pediatrics," Blickensderfer says. "One hospital would provide and staff the unit and the others could refer patients to it, avoiding staffing costs and underuse."

Five states have enacted similar legislation--Maine, Minnesota, Ohio, Wisconsin and Washington. Laws are pending in five other states, as well as in Congress.

Maine was the first state to allow hospital cooperation, passing legislation last year. The results have been a joint venture between two hospitals that established a pediatric practice for the entire western part of the state. Other proposals have included collective expansion of mental health services, as well as discussions on joint laboratories.

The Wisconsin law sets up a screening process through which hospitals and other facilities can petition state officials for authorization to share personnel, patients or services.

Such state actions, however, could collide with proposals in a new national health care plan. The Clinton administration is expected to recommend measures to enhance, not decrease, competition in health care.
COPYRIGHT 1993 National Conference of State Legislatures
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:State Legislatures
Date:Sep 1, 1993
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