Case study: Anti-trust
“Nomo Booker a forty-five-year-old executive wakes up before sunrise every Friday to meet eight other colleagues before work. For the past twelve years they have been playing basketball at a local park.
This morning was a game. Driving the lane for the winning basket, Nomo was fouled and landed badly on his left leg.
Following the game, Nomo called Dr. Jones, his primary care physician. Dr. Jones was a solo family practitioner until last year when he joined Withering Physicians Group PPG is the area’s largest physician group and is affiliated with the area’s largest hospital, Withering Hospital, through the Withering System.
Dr. Jones initially wanted to remain independent, but decreasing insurance reimbursements and increasing costs made the change unavoidable. He now no longer competes with physicians in the group; he collaborates with them. Because PPG negotiates with insurers as a single entity, the FTC is investigating whether PPG’s formation violates the antitrust laws.
After examining Nomo, Dr. Jones refers him to orthopedic surgeon Dr. Taylor at Withering Sports Medicine Group, another affiliated entity within the Withering System. Dr. Holtz refers Nomo for an MRI at Withering Radiology Center. Since the Withering System acquired Withering Radiology, its share of the radiology market has skyrocketed. Competing independent radiologists are up in arms, complaining about the lack of referrals and Withering Radiology’s practice offering insurers discounts in exchange for being designated the exclusive in-network radiology center. Withering Radiology calls this price competition; in its suit, the DOJ calls this abuse of dominance.
Unfortunately, the MRI confirmed that Nomo tore the ligaments in his knee. A week later, Dr. Henry performs reconstruction surgery on Nomo at Withering Hospital. Last year, Withering merged with its nearest competitor, Oakridge Hospital, a small, antiquated, and financially-troubled hospital.
Following the merger, Withering closed part of Oakridge’s campus, consolidating non-emergency surgeries at the newer Withering campus. The cost savings were substantial, but the FTC filed a post-closing challenge, contending that insurers were left without a viable alternative. At trial, the insurers testified in the FTC’s favor because Withering reimbursement rates are higher than Oakridge’s.
Forty-five days later, Nomo received a bill from Withering Hospital. After being told that his insurance company does not cover overnight stays for knee surgery, he learned that his insurer reduced coverage last year after the area’s dominant insurance company, Indigo Cross inserted a most favored nation’s provision in its contract with the Withering System.
This caused Withering to raise rates for Nomo’s insurer, resulting in the insurer’s decision to reduce coverage. Indigo Cross calls this price competition; in its suit, the DOJ calls this abuse of market power.
Six months later, Nomo is back on the basketball court. He is now better and wiser. After spending hours on the phone with his insurer, he eventually gives up and pays the bill. At benefits renewal time, he switches to another PPO plan” (BNA, 2015, pp.1-2)
The midterm analysis is to be broken down into the following steps.
1. Identify the most important facts surrounding the case.
2. Identify the key issue or issues
3. Specify alternative courses of action
4. Evaluate each course of action
5. Recommend the best course of action
Case study: Anti-trust
Case study: Anti-trust
Name of Student
Identify The Most Important Fact Surrounding The Case
The most critical fact surrounding this case is that after Nomo Booker’s basketball injury, his insurers could not pay for part of his medical bills. His primary physician, Dr. Jones, joined a physician group. This move saw the physician work under the Withering system, which forced Nomo to see him just like any other patient
Identify The Key Issue Or Issues
The first key issue of this case is that Dr. Jones, who was initially his primary care physician and a solo family practitioner, had joined Withering Physicians Group PPG and had an affiliation with the largest hospital in the area. The move saw the physician work under a new system unlike initially, where he worked as a solo family practitioner to Nomo. That denied Nomo immediate medical assistance.
Another significant issue is that, after Withering and Oakridge’s merger, his insurance cover became limited. It could not cover for his overnight stays at the health care facility for knee surgeries. The hospital raised its rates, a move that forced Nomo Booker’s insurer to reduce its coverage (Baker, 2019). They described it as the abuse of market power.
Specify Alternative Courses Of Action
The first alternative course of action can be filing a lawsuit against his insurer. The other option would be to take alternative insurance that covered situations like the one he had.
Evaluate Each Course Of Action
The insurer had no written argument to decline covering any medical bills due to increased rates in a medical facility, so they should be able to carter the bills. Alternatively, taking another insurance could be the best option (Rehan et al., 2018). The new insurer should be able to cater for risks like covering for overnight stays for knee surgery.
Recommend The Best Course Of Action
The best course of action is getting an alternative insurer who can cover a broader range of risks.
Baker, J. B. (2019). The antitrust paradigm: restoring a competitive economy. Harvard University Press.
Rehan, M. U. H. A. M. M. A. D., Khan, M. I., & Khan, M. K. (2018). Effects of merger and acquisition on the profitability of banks. European Academic Research, 6(8), 4029-4044.