Feb. 25, 2011, was a watershed date for the Obama administration’s antitrust efforts. On that day, the Department of Justice, Antitrust Division, filed its first case under Section 2 of the Sherman Act—the antitrust statute that prevents exclusionary actions that result in the maintenance of a monopoly or which would likely result in the achievement of a monopoly. However, the most important takeaway from this case, titled United States v. United Regional Health Care System, is that it reveals the standard under which the Obama administration will adjudge (1) the manner in which it will measure the market power of health care entities and (2) whether prices offered by hospitals to insurance plans for their array of services are predatory.1
Hospitals often enter into master contracts with commercial insurers which govern the reimbursement that will be provided for most or all of the medical services that the hospitals provide. Sometimes, these contracts provide for “bundled” pricing of these services. That is, sometimes hospitals will agree to lower prices for particular hospital services, especially those services in which the hospital is dominant in its service area, if the insurer will reimburse the hospital for other services that it offers at particular rates or on particular terms.
