To ensure that the anti-trust actions are suppressed, the U.S. Department of Justice came up with an anti-trust law, Section five of the FTC Act (15 U.S.C. 45), which forbids indiscriminative or suspicious conducts in the interstate commercial services. However, the law doesn’t prohibit a company from controlling the market but prohibits it from conducting practices that make it dominate the market. The law tries to increase the market effectiveness and to cushion customers against unscrupulous companies. However, a number of companies in the U.S have violated the anti-trust laws. One of such companies is United Regional Healthcare (Harvey, 2009).
United Regional Healthcare is a medical company that is located in Wichita Falls in Texas. The hospital has a capacity of approximately three hundred and eighty beds and it performs both inpatient and outpatient surgeries. The hospital provides various medical services such as cancer treatments, amburatory, emergency, diabetes, gynecology, neurosurgery and neurology, gastroenterology, heart operations, rehabilitation and endocrinology.
The Charges on United Regional Healthcare
The United Regional Healthcare was filed a suit against to the U.S District Court by the Justice Department on February 25th 2011.The reason behind the healthcare organization being summoned to the court was the violation of Sherman Act,15 U.S.C. Section two. The healthcare organization had conspired with, uphold or put in force conventions with the health insurance companies of which thwarted those insurers from making contracts with the rival companies that offered services that were similar to those offered by United Regional Healthcare. According the plaintiff, the accusation was:
First, the healthcare organization conducted monopolization behaviors in the area where it was headquartered and the adjacent areas. That was done through both the selling of about 90% of wide-ranging intensive-care inpatient service provisions to the various companies that gave insurance to health services; and the selling of 65% of outpatient services to the commercial health insurers. These behaviors were favored by the fact that not only does the United Regional Healthcare tops in the list of the biggest hospital in Texas but also it was the only local healthcare organization with the provisions of basic health services.
Second, the healthcare organization had monopolized the market by conspiring with the health care insurers to exclude contracting with the rival companies of United Regional Healthcare. On top of that, the United Regional also enforced the health insurer companies to be fined if they contracted with the United Regional’s rival healthcare organizations. The enforcements also required the health insurer companies to part away with between 13% and 28% extra if they don’t utilize entirely the services of United Regional Healthcare. The cynosure of that protocol was to ensure that the insuring companies to comprise the cost of a contract insuring form another company costly and also to help eliminate the rival companies that were in the caliber of the United Regional.
The insuring contracts that prohibited the rival companies from being insured by the heath insurers breached the law in the Sherman Act, Section two, and U.S.C.
The monopolized contracts have lowered the rivalry in healthcare services and thereby setting a monopoly market for United Healthcare both in the outpatient and the inpatient services. According to the plaintiff, the violations were made possible by the hindrance of the entry of the rival companies in the market; the inconsiderable protocols of the health insurer on the rival companies; and not founded reasons for the monopolized contracts with the United Regional Healthcare.
The mitigation of the charges
The United Regional simply rebuffed anything done wrong but it opined that it would amend the regulations in the contract forms with the financiers of the commercial healthcare. The verdict of the U.S District Court forbid the United Regional Healthcare from conspiring with the health insurers, implementing, upholding or applying pressure and (or) terms and orders so that it can monopolize the health insurance companies. However, the U.S District Court ruled that the United Regional could give reductions on its customers but which must be proficient when the healthcare organization’s cost composition was drawn (Jonathan, 2007).
There are many healthcare services (and other types of companies) in the U.S who secretly conspire with insurance companies so that they can monopolize the markets and also to marginalize their rivals. It’s the monopolization and such anti-competitive conducts that reduce the quality of services.
Proposed actions to avoid future anti-trust actions
To exclusively do away with forms of anti-trust conducts can be a very difficult task. However, the various anti-trust practitioners can make efforts to suppress the occurrence of such forms of conducts. There are various methods that can be used to ensure that such behavior doesn’t happen:
To ensure that each and every company that conducts anti-trust actions are brought to book, since they are only charged by rival threatened companies, the U.S Department of Justice should vet all the companies that give insurance services and see their terms and conditions; and then use their terms and conditions to sue the companies if there are companies that complain about them and making it a lesson to other companies by fining them hefty fines. In that way, the insurance companies would try their level best to shun off companies that push them to conspire since if they are sued for several times, they would be cautious and much reluctant to violate the anti-trust laws (Ghosal Vivek, 2007).
Staying clear of conniving with rival companies
If a company stays clear of all contracts and connives with the rival companies will guarantee a company doesn’t conduct anti-trust actions. That can only be realized if a particular company doesn’t engage in some conversations with another rival company, and not having contracts with them in certain business practices that can be perceived to be monopolization. The rival companies should neither discuss with one another on the prices that they shall alter nor the coverage of their markets.
By having a written –down protocol
The administration of a particular company should be conscious of the anti-trust laws and should hence adhere to them. The objective of the company should be written down and the anti-trust laws illustrated to the workers and the senior leaders and should be tipped on the way that the company could be administrated so that the anti-trust laws can not be violated (William, 2007).
Steering clear of the vertical preventions
The various companies should conduct their business with both the suppliers and the clients in ways that do not marginalize particular companies. An example can through the provision of a company’s product independently. The administrative leaders of those companies should be aware that even though mutual business practices are recognized by the rule of law, any schemes that would marginalize the suppliers of another rival company would be the violation of the law.
William, C. (2007). Essentials of health care finance. London: Jones & Barlett Learning.
Ghosal Vivek, S. (2007). The political economy of antitrust. Oxford: Emerald Group Publishing.
Harvey, S. (2009). State antitrust practice and statutes (Fourth). Chicago: American Bar Association.
Jonathan, J. (2007). Ant-trust law developments (sixth). Chicago: American Bar Association.