The federal antitrust lawsuit filed against Charlotte, N.C.-based Carolinas HealthCare could have sweeping implications for hospitals and patients nationally, reports Charlotte Observer.
The Department of Justice and North Carolina Attorney General filed an antitrust lawsuit against Carolinas HealthCare Thursday, alleging the state's largest hospital system used steering restrictions in contracts with commercial insurers to reduce competition with area hospitals. Illegally limiting healthcare competition enabled Carolinas to drive up patient care costs, according to the complaint.
Carolinas officials maintained the system follows antitrust laws and is dedicated to making healthcare more affordable.
Below are four ways the case could affect hospitals nationally.
1. A win for the DOJ would establish an important legal precedent, Fiona Morton, an economics professor at YaleUniversity's School of Management told Charlotte Observer. All hospitals and health systems with steering provisions in payer contracts would be affected by the decision. Exactly how prevalent such contract restrictions are nationally is unclear, according to the article.
2. Should the court rule in the DOJ's favor, hospitals nationwide might feel compelled to remove anti-steering provisions from their contracts with insurers.
3. The removal of anti-steering provisions could positively impact healthcare consumers by increasing competition between hospitals, which could result in lower healthcare prices.
4. However, large hospital systems may find other ways to restrict competition and control prices if they are forced to remove anti-steering provisions, Barak Richman, a law professor from Duke University, told Charlotte Observer. Many systems across the nation have already acquired enough competing hospitals and physician practices that they're able to leverage their market power to demand higher payments from insurance companies.