New 911 system for health care industry antitrust violations

The federal agencies in charge of cracking down on anti-competitive behavior have already agreed to work together on health care issues. Now, they are looking for tips from the public. The Federal Trade Commission, Health and Human Services, and the Justice Department launched HealthyCompetition.gov last month. It is for people who have a good reason to think medical bills spring from antitrust violations in the health care industry. David Lawrence is the policy director in the Justice Department’s antitrust division. He talked about the outreach effort with Federal News Network’s Jared Serbu.

Interview Transcript: 

Tom Temin Federal agencies in charge of cracking down on anti-competitive behavior have already agreed to work together on health care issues. Now, they’re looking for tips from the public. The Federal Trade Commission, Health and Human Services and the Department of Justice launched healthycompetition.gov last month. It’s for people who have good reason to think medical bills spring from antitrust violations in the health care industry. David Lawrence is the policy director in the Justice Department’s antitrust division. He talked about the outreach effort with Federal News Network’s Jared Serbu.

Jared Serbu So, let’s talk some big picture stuff. First of all, you know, we always love to see agencies working together on whole of government stuff. So talk to us about how this tie up between DOJ and FTC and HHS came together. Why the focus on health care in particular, when it comes to calling out to the public for complaints?

David Lawrence I think that’s a great question. It’s an exciting part of this particular story. I should take you a little bit further back, even behind this collaboration, to an executive order that President Biden issued in July of 2021 that was focused on competition policy. So that’s what we focus on at the antitrust division. And a concern the president had that competition wasn’t working as well as it should be in the economy. So, you know, competition is, we’re all familiar with the free market. It’s the fundamental building block of how we do things. And when competition is working well, the people have the power in the markets. They’re free markets. When competition isn’t working so well, the companies have the power and there’s too much corporate power. And one of the main focuses of this executive order was to ask, how can we get competition working better? And one of the answers was maybe we need more collaboration within government. So you have agencies like my agency, the antitrust division of DOJ. You have agencies like the Federal Trade Commission, but then you have all of these sector regulators who have a lot of expertise, in particular markets, like HHS with health care. The executive order really, you know, kickstarted a process. I mean, it ordered us to do this, of figuring out how agencies across the government can work better to identify competition problems and solve them. And so that bled, you know, as we were working with HHS and FTC to this healthycompetition.gov portal, because one of the problems we came across is if you’re a person out there in the country, you have a concern, you or I might know the nuances of the federal government where you should go with that concern, but it’s a lot to ask the lay public to. And so we thought by having a joint portal, make it a lot easier for people with health care competition concerns to reach the federal government. And then we’ll do the work on the back end, the federal agencies of figuring out exactly where that complaint should be routed.

Jared Serbu Kind of on that point. You know, that’s interesting that you mention that, because it seems to me the health care market is sort of unusually opaque to most people, more than most markets, probably. Most of us don’t understand the inner workings. We have no idea how prices are set. It’s not really something you can shop for. So who really do you expect to be the complainants submitting things to this portal? Is it really the public, or is it more going to be people who are more embedded in the health care system?

David Lawrence So I think one of the really interesting features of the health care system, it’s such an incredibly important market or series of markets. It’s such an important part of our economy, and it touches everyone, ranging from, yeah, that patient who maybe goes to the doctor every five years, probably less likely to see a complaint coming in from someone like that. But before you get to the largest health care firms, you have a lot of small practitioners, nurses, people who are caregivers, who are involved with multiple patients, supporting them, friends and family. Right. And so I think there are a lot of people who are very focused on and invested in the health care system generally, and I think we’re excited to hear more directly from them through this portal.

Jared Serbu You and I were talking a little bit off the air. Most of the public doesn’t really have a super good understanding of what an antitrust violation might look like, but let’s confine it to health care. Does it look different in health care than it does in other markets? And what are, like, some examples of what an antitrust violation in the health care space might be?

David Lawrence Sure. Well, you know, I’ll say the way it can look different in the health care market is the effects are so significant. You know, when you think about a market that isn’t functioning well from a competition perspective, we often think about, you know, higher prices, lower quality, worse wages for workers. Well, you know, I care a lot about the price of cars. That matters to a lot of people. But when the quality of health care goes down, that means people not getting the treatment they need. Maybe people not getting cured from that disease, right? I mean, these are profound implications. So the difference there is really one, I think, of prioritization and focus. Now to answer your question about what the health care antitrust violations look like, you do see, and we have seen things that would be a problem in any industry. So price fixing is a core antitrust violation. We pursue those criminally if two competitors fix the prices of their products. We recently settled a case with Glenmark and Teva, two generic pharmaceutical manufacturers. They were fixing the prices of generic drugs. And so this is where I talk about, you’re not just talking about higher prices for those patients. You’re talking about people who get priced out of being able to afford that generic drug. We also have a similar concern when companies divide up market. So instead of fixing the price, they say, well, you’ll get half the market, I’ll get half the market. We had another case involving cancer specialists in Florida, you know, relatively local case, but two cancer specialist groups that sort of divided up which towns they would each cover, which sort of services they would each cover. And by splitting that between them, instead of competing over patients trying to get people and give them the best service, you lose that competition. One other area I’ll mention is particularly important in health care. We care a lot about competition for workers. It’s competition between competing employers that drives our wages up. Right? It’s that threat of getting a higher salary somewhere else. And some of the parts of the health care system, like nurses, that competition is incredibly important. So we had a case a couple of years ago that related to wage fixing. So not price fixing, but fixing the wages of nurses and allocating which groups would hire nurses. That sort of thing cuts into the pay of some of our most important health care practitioners. So it’s a real priority.

Jared Serbu So talk us through a little bit what actually happens when someone submits a complaint. Where does it go from there? Because people like to have a sense of, if they take the time to do something like this and submit this information, somebody is actually going to read it and do something with it.

David Lawrence Absolutely. And we will read it and focus on it. It goes to an internal access portal where both we and FTC, and in appropriate cases, HHS will have access to it. And so we’ll have the staff on our end, and they’re already doing this, review the complaint, determine if there’s a sufficient concern that one of the agencies ought to be reviewing further, and then we’ll do the work of determining which agency ought to do that. So, one of the features, and I just think this is good government, we have a shared jurisdiction at the antitrust division with the Federal Trade Commission, certain competition issues. That leads to some things that are not always intuitive to complainants out there. For example, the FTC handles most hospital cases. We at the antitrust division, we handle most insurance cases. So when we’re reviewing a complaint that comes in, now that we have the portal, we can decide, okay, whose jurisdiction is this in? And we don’t need to burden the public with having to navigate multiple websites and figure out the nuances of federal jurisdiction.

Jared Serbu Yeah. And I imagine a lot of that’s true across the antitrust space. Have you used this model for anything else besides health care, or might this serve as one for other areas?

David Lawrence In fact, this is the second. A couple of years ago, we launched a portal with the United States Department of Agriculture, farmerfairness.gov. And that focuses on, similarly, competition issues, but in the farming and agriculture area, which is another big priority, but also one where the regulatory authorities and jurisdictions, the statutes in play, I mean, they’re Byzantine, right? And so we kind of ask the same question, are we serving our public well if a farmer needs to figure out all of those details? You know, I’m ten years in federal government, and I only know 70% of them. Are we fair to those farmers or should we have a joint portal and then we can do that work? And so that actually was the model for healthycompetition.gov.

Jared Serbu And I think that leads me to to my final question. Based on that experience, I mean, do you expect to learn about a flood of anti-competitive behavior out there that you just don’t know about, that’s below the surface? Do you have any sense that that might be the case and that you may need more resources to actually pursue these?

David Lawrence So I’ll answer your second question first. I think we need more resources to pursue cases day to day. I mean, the antitrust division has sole jurisdiction over a lot of parts of our country and so these cases are very burdensome and it’s a lot of work. Right? In terms of how many were received through the portal, if the USDA portal or the Farmer Fairness Portal is any indicator, we’ll get a meaningful number. We’ll get leads to investigate. I don’t know that we will get a flood of them, but we will be hearing from people we otherwise wouldn’t have heard of and able to investigate and pursue issues that we wouldn’t have gotten to otherwise.

Tom Temin David Lawrence is the policy director in the Justice Department’s antitrust division, talking with Federal News Network’s Jared Serbu. Find this interview at federalnewsnetwork.com/federaldrive and subscribe to the Federal Drive wherever you get your podcasts.

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