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Messner'S Effect On Hospital Consolidation And Anticompetitive Behavior, Jaclyn Bacallao

Seventh Circuit Review

By 2021, healthcare spending is expected to reach a whopping twenty percent of gross domestic product. One of the less-publicized causes of the rapid growth in healthcare costs is hospital consolidation, which has allowed hospitals to use their market power to raise prices for private payors.

Attempts to limit abuses of market power in this sector have been insufficient. From the 1980s until the early 1990s, the Federal Trade Commission and the Department of Justice blocked every anticompetitive merger. However, the tides changed in the mid-1990s when the regulators lost five successive cases that challenged hospital mergers. Economists were astounded …