The policies and practices of medical institutions are governed by the same laws as other private businesses or enterprises. The US legislation explicitly prohibits the activities which may result in monopolization of the market: there are several statutes aimed to ensure fair competition among the medical agencies. Among them we can single out the following ones: 1) the Sherman Act, 2) the Clayton Act, 2) the Robinson-Patman Act and many others (Rubin, 2001). The organizations, which intend to enter into joint venture, run the risk of facing numerous lawsuits. In this paper we intend to discuss these bills in connection with the future plans of our hospital. This report can help the management to avoid possible pitfalls. The concern of the government is quite understandable because the commercialization of healthcare industry can fully undermine the ethical principles of this profession.
The Sherman Act can be regarded as the cornerstone of American competition law. It is intended to prevent any agreements, contracts or conspiracies which can hinder interstate trade (Sanbar & ACLM, 2004). Furthermore, every merger that can hypothetically weaken competition among providers of medical services or lead to increase of fees can be viewed as illegitimate. The fine for such activities is normally tantamount to $10 million (Rubin, 2001, 4). Yet, it should be pointed out that the Sherman Act gives only general guidelines for to governmental officials. Its principles are further elaborated in the Clayton Act. According to this law, every person who has been harmed by anti-competitive practices of the company, can sue against this enterprise in order to protect his or her rights and receive indemnity for the losses (Fregmen, 2006). Another point, which should be mentioned, is that Clayton Act widens the scope of such concept as monopoly. For example, a holding may also be viewed as a form of anti-competitive behavior. Still, it has to be admitted that these laws can allow monopoly, only on one indispensible condition: if it is gained through the excellence of services, customer care, professionalism and so forth. Otherwise, the firm (or firms) can be liable to prosecution by the authorities. The penalties for non-noncompliance depend on the specific provision that has been violated.
Apart from that, the management of the hospital should not overlook the Robinson-Patman Act. This legislative act focuses on price discrimination or the situation when a firm charges different fees for the same products or services. This law is frequently applied to pharmaceutical firms setting drastically different for wholesale and retail customers. The key rationale for this legislative bill is to save small firms from bankruptcy. In addition to that, the Robinson-Patman Act aims to stop price dumping or lowering the prices as this tactics can drive the major competitors out of business. At the beginning, this may seem to be very beneficial to the patients; but afterwards, the medical fees may significantly rise.
It has to be admitted that these laws do not fully forbid consolidation of healthcare organizations as such strategy can improve their performance. However, there is great likelihood that this merger will affect pricing policies, rather than efficiency of medical workers. In this paper, we have enumerated the major competition laws in the US legislation as well as their implications for this organization. The company can collaborate with other medical institutions but this collaboration must not infringe on the rights of patients.
Reference List
Fregmen. B (2006). Medical law and ethics. Pearson/Prentice Hall.
Rubin J. (2001) “General Overview of United States Antitrust Law”. Congressional Research Service.
Sanbar S & American College of Legal Medicine. (2004). Legal medicine. Elsevier Health Sciences.