Principal and Co-Leader of Brattle’s Global Antitrust & Competition practice Dr. Loren Smith and Senior Associate and Co-Leader of Brattle’s Healthcare & Life Sciences practice Dr. Josephine Duh recently coauthored an article for Law360. The article, “4 Economic Takeaways From 6th Circ. ProMedica Decision,” addresses the importance of considering contract negotiations in antitrust assessments of healthcare provider and insurance carrier conduct, using the August 10th St. Luke’s Hospital v. ProMedica Health System Inc. decision as an example.
There are four economic concepts that were evident in St. Luke’s Hospital v. ProMedica Health System Inc. that may apply more broadly to other cases:
- In order to leverage market power in one market to gain or maintain power in another, the accused firm must have market power in the market from which the alleged ability to leverage derives.
- For a vertically integrated company, the alleged conduct likely affects multiple business segments, and therefore all segments must be assessed.
- An evolving competitive environment in a dynamic industry such as healthcare may affect the incentives of market participants and the bargaining processes.
- The economic incentives that govern a firm’s management of contractual relationships with its business partners include procompetitive protections of investments.
The full article can be found here.