In Lowenstein Sandler’s The “Big Thoughts/Quick Reads” Antitrust Blog, Leiv Blad Jr., partner and Co-chair of the firm’s Antitrust & Trade Regulation group, explores the impact of evolving antitrust laws on the current COVID-19 crisis and considers whether a more expansive approach by the Federal Trade Commission (FTC) to reviewing hospital consolidation might improve the availability of resources to combat future pandemics.
In his post, “The Coronavirus Heat-Seeking Missile,” Blad observes that a sharp decrease in hospital beds and services occurred as the traditional fee-for-service model gave way to the managed care model, which forced hospitals to reduce their costs. The FTC reasonably concluded that hospital mergers created competitive efficiencies, leading to a broad consolidation of resources. Inventory plummeted, and capital was diverted to innovations in medical technologies, treatments, and pharmaceuticals intended to further increase efficiency of care.
Now, the number of beds available across the country is insufficient to accommodate the expected influx of seriously ill patients, and the government is closing down large segments of the economy in its attempt to slow the virus’ progress. Blad posits that the FTC alone may not be “competent to consider those larger public policy issues” and asks whether, in order to better prepare for future health crises, “the scope of the FTC’s review of hospital mergers [should be enlarged] to include the input of experts who can anticipate the likely effect of consolidation on the ability of our health care system to respond to sudden shocks that threaten the quality of patient care.” He will address that question in a blog post to be published soon.