While the pandemic may justify collaboration among competitors like it has in New Mexico and Iowa, it won’t ease collusion provisions, regulators said.
The Justice Department and Federal Trade Commission issued a joint statement last March that the antitrust laws allow many types of collaboration. Partnering on research and development, sharing of know-how and most joint purchasing arrangements are generally acceptable under the antitrust laws, regulators said.
Healthcare facilities may need to work together to deliver resources and services to underserved communities and they may need to combine production and distribution efforts for things like personal protective equipment, the agencies said, noting that they should be “limited in duration.”
But antitrust agencies are prepared to take civil or criminal actions if employers suppress wages and benefits, reach no-poach agreements or share competitively sensitive labor data. Regulators said they will be keeping a close eye on any organizations that collude to increase prices, divvy up markets, lower wages, decrease output or reduce quality.
“The Antitrust Division will not tolerate companies and individuals who use COVID-19 to harm competition that cheats payroll and non-payroll workers,” Makan Delrahim, former assistant attorney general of the DOJ’s antitrust division said in prepared remarks. “This includes doctors, nurses, first-responders, and those who work in grocery stores, pharmacies, delivery and distribution networks, and warehouses, among other essential service providers on the front lines of addressing the crisis. Even in times of crisis, we choose a policy of competition over collusion. The division will use its enforcement authority to ensure that companies and individuals who distort the free market for labor are held to account.”
Sen. Amy Klobuchar (D-Minn.) proposed a bill that would increase the FTC and DOJ’s budget by about $300 million each. The Competition and Antitrust Law Enforcement Reform Act would also raise civil fines for antitrust violations, create an independent office of the competition advocate in the FTC and generally tighten the regulatory framework.
“That suggests there might be more investigations if they have more people to handle them,” Vessel said.
Still, the DOJ and FTC likely won’t delve too deeply into COVID-related partnerships as long as there isn’t any blatant anticompetitive behavior, she said, adding that healthcare companies should generally be all right if they aren’t sharing competitive information like prices or are colluding.
To mitigate risk, hospitals could ask for an advisory opinion from the FTC, which the agency can expedite. They should have a formal protocol that conveys what employees can and cannot do during these partnerships, Vessel said. They should also keep a record of what data they are and are not sharing.
Antitrust rules like the federal Emergency Medical Treatment and Labor Act, which was implemented in 1986 to prevent hospitals from transferring patients for financial purposes, are there for a reason, Gonzales said.
“There are opportunities there, but I certainly wouldn’t advocate for moving quickly,” she said. “You have to consider the unintended consequences from changing those policies.”
Gonzales said that the New Mexico hospitals are starting to wind down the frequency of their meetings as the number of COVID cases subsides. They’ll keep an eye on their capacity-scoring assessment and ramp up or down accordingly.
As far as the long-term prospect of working more closely with competitors, providers will likely revert to business as usual for the most part post-pandemic, Vessel said.
“I don’t think they’ll necessarily want to keep doing it; they want to compete with the other hospital,” she said.
When the emergency declaration ends, hospital administrators will start debriefing and incorporate all the lessons learned into their disaster response programs, Gonzales said.
“What will persist is a greater sense of collaboration and the capacity to exchange data quickly,” she said. “We did it first by necessity, but we have no reason to stop doing this.”