A friend has written to ask me what Judge Winmill could have meant in the St. Luke's hospital-physician merger case when writing that the deal should be unwound because "there are other ways to achieve the same effect that do not run afoul of the antitrust laws and do not run such a risk of increased costs."
So, what are those things, my friend asks -- joint ventures? Something else?
This is a great question. I, too, find Judge Winmill's assertion to be a little eliptical. Other business associations and practice organization forms may offend antitrust law, short of a merger, so the technical form of the integrated entity can't be the problem (see Penn-Olin). And it is always useful to argue that efficiencies that may be reaped short of a merger should be just that.
But I can't tell in the St. Luke's case whether Judge Winmill was more irked by bad economic analysis or the genuine failure of the combining parties to consider alternatives. The cool thing is that a fair amount of the trial record has been made public in the St. Luke's matter, making it possible to know more than outsiders usually know about what happened in the presentation of the case. I need to read more.
Isn't it likely, my friend asks, however the combined integrated entity is styled, that referral exclusivity, as a practical matter, might spill over into some kind of de facto referral practice even outside of the ACO population?
This is a great question. It is sharpened by the special antitrust rules for analyzing Medicare Shared Savings Program participating entities. Those same MSSP rules are in the administrative rulemaking process even as we speak. The proposed revised regulations seem somewhat merger wary (p.55) and very concerned about ACO independence (pp. 57-66), just like my friend.