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What are some of the ways the Federal Trade Commission Act could apply to a healthcare operation?

the question: What are some of the ways the Federal Trade Commission Act could apply to a healthcare operation?

respond to a students response:

The students response:    As the population continues to age and healthcare costs rise, hospitals must look for ways to decrease costs and streamline care.  One solution to this problem is through the formation of mergers and acquisitions.  The hospital at which I am employed is a not-for-profit hospital currently being acquired by a larger not-for-profit system.  The acquisition has prompted many changes which include cost reduction and structural changes of the leadership team.  The goal is for the acquisition to reduce costs within the organization and perhaps pass along costs savings to patients.  In reality, the acquisition may have prevented the smaller hospital from closing its doors.

The current market seems to encourage larger healthcare organizations rather than smaller ones.  It is important that these larger organizations do not create a monopoly in the market and put smaller hospitals or clinics out of business.  The Clayton Act, which states that an acquisition may not substantially lessen competition or create a monopoly, is enforced by the Federal Trade Commission (Showalter, 2012, pp. 453-454).  If hospitals strive to become more efficient and pass along savings to patients, then the acquisitions serve their intended purpose.  However, if the acquisition forces smaller hospitals and clinics out of business, a significant problem exists.  Closure of hospitals and clinics, especially in rural communities, limits access to care.

Hospitals must also be careful when buying small free-standing clinics and failing to implement a name change or notify the public.  This could be seen as “making false claims or misrepresentations” (Showalter, 2012, p. 454).

Overall, competition is a tricky subject when dealing with healthcare.  If healthcare organizations crush the competition, communities are hurt as patients lose access to care.  The Bible reminds leaders to remember others during competition.  Leaders would be wise to follow the teachings from Philippians 2:3-4: “Do nothing from rivalry or conceit, but in humility count others more significant than yourselves. Let each of you look not only to his own interest, but also to the interest of others” (English Standard Version).

Showalter, J. S. (2012).  The Law of Healthcare Administration. (7th ed.). Chicago, IL: Health Administration Press. ISBN: 978-1-56793-644-5.

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