New 911 system for antitrust violations in the healthcare industry

Federal agencies responsible for combating anticompetitive behavior have already agreed to cooperate on health care issues. Now they are waiting for tips from the public. The Federal Trade, Health and Human Services Commission and the Department of Justice launched HealthyCompetition.gov last month. It is intended for people who have good reason to believe that their medical bills are due to antitrust violations in the healthcare industry. David Lawrence is the director of policy in the antitrust division of the Department of Justice. He spoke with Jared Serbu of Federal News Network about the outreach efforts.

Interview transcript:

Tomek Temin Federal agencies responsible for combating anticompetitive behavior have already agreed to cooperate on health care issues. Now they are waiting for tips from the public. The Federal Trade, Health and Human Services Commission and the Department of Justice launched healthcompetition.gov last month. It is intended for people who have reasonable cause to believe that their medical bills are due to antitrust violations in the healthcare industry. David Lawrence is the director of policy in the antitrust division of the Department of Justice. He spoke with Jared Serbu of Federal News Network about the outreach efforts.

Jared Serbu So let’s talk about the bigger picture. First, we always love to see agencies working together on all government affairs. Talk to us about how the connections between the Department of Justice, the FTC, and HHS came together. Why focus specifically on health care when it comes to calling the public to complain?

David Lawrence I think that’s a great question. That’s the exciting part of this particular story. I should go back a little further, even beyond this cooperation, to the executive order issued by President Biden in July 2021, which focused on competition policy. That’s why we focus on this in the antitrust division. The president was also concerned that competition in the economy was not working as well as it should. So, you know, competition is, we all know the free market. This is a fundamental element of our operation. And when competition works well, people have power in markets. These are free markets. When competition is not performing well, companies have power, and corporate power is too great. One of the main goals of this implementing regulation was to ask how can we make competition work better? One response was that perhaps we need more cooperation in government. So we have agencies like mine, the antitrust division of the Department of Justice. There are agencies like the Federal Trade Commission, but there are also all the sector regulators that have a lot of expertise in particular markets, like HHS in health care. The executive order really, you know, started a process. I mean, he told us to do this, which is to figure out how government agencies can do better, identify competitive problems and solve them. And so that bled as we worked with HHS and the FTC on healthcompetition.gov because one of the issues that we ran into was that if you’re a person who lives in the country, you have concerns, or I may know the nuances of the federal government, where you belong succeed with this matter, but that is a lot to ask of laymen. So we thought having a common portal would make it much easier for people with concerns about competition in health care to reach out to the federal government. And then we’ll look at the backend, the federal agencies, to figure out where exactly the complaint should go.

Jared Serbu Something like that. You know, it’s interesting that you mentioned that because I think the health care market is incredibly opaque to most people, probably more so than most markets. Most of us don’t understand the inner workings. We have no idea how prices are determined. It’s really not something you can buy. So who do you really expect to be the complainants reporting cases on this website? Is it really about society, or will it be people who are more embedded in the healthcare system?

David Lawrence So I think one of the really interesting things about the health care system is that it’s an incredibly important market or series of markets. It’s a very important part of our economy that affects everyone, right down to the patient who maybe comes to the doctor every five years and is less likely to see a complaint from that person. But before you get to the biggest healthcare companies, you’re dealing with a lot of small doctors, nurses, people caring for a lot of patients, supporting them, friends and family. Normal. So I think there are a lot of people who are very focused on and invested in the healthcare system in general, and I think we’re looking forward to hearing more directly from them through this portal.

Jared Serbu You and I talked on the radio for a while. Most of the public doesn’t really have a very good understanding of what an antitrust violation might look like, but let’s limit it to health care. Is it different in healthcare than in other markets? What are some examples of violations of antitrust law in the healthcare space?

David Lawrence Bright. Well, I will say that it may be different in the healthcare market because the effects are so significant. You know, when we think about a market that is not functioning well from a competitive perspective, we often think about higher prices, lower quality, lower employee wages. You know, I really care about the price of cars. This matters to many people. But when the quality of health care declines, it means people don’t get the treatment they need. Maybe people don’t get cured of this disease, right? I mean, these are profound implications. So the difference, I think, is prioritization and focus. Now, to answer your question about what antitrust violations look like in healthcare, you actually see, and we have seen, things that would be a problem in any industry. Therefore, price fixing constitutes a fundamental violation of antitrust law. We prosecute them criminally if two competitors set the prices of their products. We recently settled a case with Glenmark and Teva, two generic drug manufacturers. They set prices for generic drugs. And that’s why I’m talking about this, not just higher prices for these patients. You’re talking about people being priced below what they can afford to buy a generic drug. We also have similar concerns when companies divide the market. Instead of setting a price, they say, well, you get half the market, I’ll get half the market. We had another case involving cancer specialists in Florida, you know, a relatively local case, but two groups of cancer specialists who sort of split up the cities that each of them was going to work in and what kind of services they were going to cover. By dividing it between them, instead of competing for patients, trying to attract people and give them the best service, you lose that competition. One more area I will mention is particularly important in health care. We care very much about competition for employees. It is competition between competing employers that increases our wages. Normal? It’s a threat to get a higher salary elsewhere. And for some elements of the health care system, such as nurses, this competition is extremely important. A few years ago we had a case related to wage determination. So not setting prices, but setting nurses’ salaries and assigning groups that will employ nurses. This kind of thing affects the pay of some of our most important health care workers. So this is a real priority.

Jared Serbu So tell us what actually happens when someone makes a complaint. Where does this come from? Because people like to feel that if they take the time to do something like this and submit this information, someone will actually read it and do something with it.

David Lawrence Absolutely. And we will read it and focus on that. They go to an internal access portal where we, the FTC and, where appropriate, HHS will be able to access them. So we will have staff on our side who already do this, review the complaint, determine whether there is sufficient concern that one of the agencies should conduct further review, and then we will work to determine which agency should do that. So one of the features – and I just think it’s good government – is that we have joint jurisdiction in the antitrust division with the Federal Trade Commission with respect to certain competition issues. This leads to some things that are not always intuitive to complainants. For example, the FTC handles most hospital cases. In the antitrust department, we handle most insurance cases. So when we review the complaint that we receive, now that we have a portal, we can decide, OK, whose jurisdiction does this fall under? We also don’t have to burden the public with having to browse multiple websites and learn the nuances of federal jurisdiction.

Jared Serbu Yes. And I think a lot of that is true across the antitrust space. Have you applied this model to anything else outside of healthcare, or can it serve as a model in other areas?

David Lawrence In fact, it is the latter. A few years ago, together with the United States Department of Agriculture, we launched farmerfairness.gov. And that has a similar focus on competition issues, but in the area of agriculture, which is another big priority, but also one where the regulators and the jurisdictions, the laws that apply, I mean, are Byzantine, right? So we ask the same question: Are we serving society well if the farmer has to know all these details? You know, I’ve been in the federal government for ten years and I only know 70% of them. Are we being fair to these farmers or should we have a common portal and then we could do this work? And that was actually the model for healthcompetition.gov.

Jared Serbu And I think that brings me to my last question. Based on this experience, do you expect to learn about a deluge of anti-competitive behavior that you simply have no idea about and that lies beneath the surface? Do you have a feeling that this might be the case and that you might need more resources to actually pursue it?

David Lawrence So let me answer your second question first. I believe we need more resources to deal with things on a day-to-day basis. I mean, the antitrust division has exclusive jurisdiction over many parts of our country, so these cases are very burdensome and require a lot of work. Normal? In terms of the number received through the portal, if the USDA portal or the Farmer Fairness portal is any indicator, we will get a significant number. We’ll get leads to investigate. I don’t know if we’ll get a flood of them, but we’ll hear from people we otherwise wouldn’t hear from, and we’ll be able to explore and address issues we wouldn’t otherwise get to.

Tomek Temin David Lawrence, director of policy for the Justice Department’s antitrust division, talks with Federal News Network’s Jared Serbu. Find this interview at federalwsnetwork.com/federaldrive and subscribe to Federal Drive wherever you get your podcasts.