Joint Development of Specialized Clinical Services

The Statements of Antitrust Enforcement Policy in Health Care (“Policy Statements”), issued jointly by the Department of Justice and Federal Trade Commission, provide, at Statement 3, guidelines for evaluating whether a joint venture between two competing hospitals to develop specialized clinical services, including the recruitment of related physician specialists, would generate antitrust risk.

According to Statement 3 of the Policy Statements, the antitrust analysis of these ventures and recruiting efforts involves the following four-step process: (1) the parties should define the relevant market to identify other providers that patients might consider good substitutes; (2) the parties should evaluate the potential anticompetitive effects of the venture (for example, if the venture has a goal of recruiting a particular specialty (such as a neurosurgeon), the venture should evaluate whether an agreement for such recruitment would eliminate a current competitor (e.g., one participant decides to eliminate a current neurosurgeon), and whether the joint venture has other active competitors in the market); (3) the parties should evaluate the procompetitive effects of such a venture (including whether the recruitment strategy improves quality and service to patients in the area); and (4)  the parties should analyze any collateral agreements (e.g., to prevent participants from independently recruiting) to determine whether those agreements are reasonably necessary for the joint venture.

Although collaborative arrangements can raise antitrust concerns, focusing recruiting efforts on clinical specialties where a sufficient volume of patients is necessary to both attract specialist and maintain high-quality care, as well as limiting non-related collateral agreements, will help mitigate antitrust risk.  However, because the analysis is highly fact-specific, parties should utilize the four-step evaluation process set forth in Statement 3 of the Policy Statements before engaging in this type of joint conduct.

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For additional information about the issues discussed above, or if you have any other antitrust concerns, please contact the Epstein Becker Green attorney who regularly handles your legal matters, or one of the authors of this Antitrust Byte: