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DEPARTMENT OF JUSTICE
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PRESS CONFERENCE
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ATTORNEY GENERAL JANET RENO
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Wednesday, September 15, 1993
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9th & Constitution Avenue, N.W.
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5th Floor Conference Room
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Washington, D.C. 20530
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PRESS CONFERENCE |
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(10:35 a.m.) |
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ATTORNEY GENERAL JANET RENO |
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GENERAL RENO: We would like to welcome the |
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First Lady to the Department of Justice. She is |
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helping -- this is her first visit here, and I think it is |
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wonderful that you as a lawyer have a chance to see where |
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justice gets done in this district. |
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I would like to introduce Anne Bingaman, who
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the Assistant Attorney General in charge of the Antitrust |
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Division, who has been doing a wonderful job, and it is a |
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special privilege to introduce the Chairman of the Federal |
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Trade Commission, Janet Steiger. It is truly a pleasure |
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to have her here, and it has been a pleasure to work with |
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you. |
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We have Senator Howard Metzenbaum, who was
the |
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first person to talk to me about antitrust when I arrived |
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in Washington back in those earlier days, and the first |
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person I met in Congress, Chairman Jack Brooks. It is a |
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privilege to have you here, Senator. |
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Americans want quality health care. Everywhere |
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I have gone throughout this Nation in these last 6 months, |
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the refrain was the same from people in every walk of |
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life. To achieve that goal, to assist the President and |
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Mrs. Clinton in this effort, we must make sure that we do |
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our part in the Department of Justice to eliminate |
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excessive costs and delay in setting up an efficient, |
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effective health care system. |
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We have been asked by health care providers, |
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where would we stand under the antitrust laws? What can |
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we do, what can't we do? We are here today to announce an |
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antitrust policy statement to provide clear guidance to |
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health care providers. The policy statements issued |
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jointly by the Justice Department and the Federal Trade |
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Commission include a commitment for expedited business |
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review, the first time this has been done. |
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Requesters can expect an answer within 90 days |
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after submitting the necessary information as to their |
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particular situation and what can be done under the |
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antitrust laws. This will be important. |
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Take some of these examples. Three small |
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hospitals in Maine want to share the cost of a mobile CAT |
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scan machine. They have not done it, because they cannot |
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find out quickly whether the agreement would violate |
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antitrust laws. We want to give them the answer up front |
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so that they know where they stand. |
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Hospitals in another city want to know whether |
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they can get together to buy a medivac helicopter. |
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Hospitals in Ohio want to buy furniture together. We want |
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to let them know whether they can or can't under the |
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antitrust laws in an expedited way that is fair to all |
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concerned. |
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Doctors in another State want to know whether |
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they can form a preferred provider organization to |
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contract directly with insurance companies. An accounting |
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firm in Atlanta isn't sure whether it can set up a deal |
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for acute care services. |
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The speed and extent to which health care reform |
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is carried out will depend on how quickly and how well the |
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Government is prepared to answer those questions, and that |
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is the reason we are here today, but that is not the only |
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effort we are undertaking in health care reform. The |
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President has asked for a larger review of health care |
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issues. |
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The Justice Department is currently evaluating |
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measures to increase the Federal power to fight fraud and |
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abuse, for example by strengthening anti-kick-back laws |
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and making heavy penalties against defrauding the |
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Government applicable to those who defraud the private |
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health care system as well. Those of us in law |
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enforcement plan to be an important part in the President |
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and Mrs. Clinton's effort to make sure that health care is |
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available and affordable for all Americans. |
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The First Lady and I are going to have to leave |
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early, so I want to make sure that she has an opportunity |
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to be heard first. |
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It is a great privilege to have her here today. |
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I met her a little over a year ago, and to
watch this lady |
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in action has been one of the great opportunities. She is |
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a person who is dedicated to this whole Nation and day-in |
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and day-out through these first months of this first year |
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she has truly demonstrated her commitment to America and |
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to health care reform. It is wonderful to have you here, |
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Mrs. Clinton. |
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(Applause.) |
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FIRST LADY HILLARY RODHAM
CLINTON |
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MRS. CLINTON: Well, as Attorney General Reno |
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said, this is my first visit to the Justice Department, a |
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place that has always had a lot of personal and |
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professional meaning for me, an with whom I have had a |
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relationship through the years with various lawyers who |
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have had the privilege of serving here. |
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It is a particularly special occasion for me
to |
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be here, and to know that Attorney General Reno is at the |
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helm, and to know how faithful and committed the many, |
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many people in this Department are to what the words above |
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the entry say. |
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I particularly want to thank Attorney General |
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Reno and her Department for their participation in our |
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health care reform effort. From the very beginning, |
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lawyers from the Justice Department have been involved in |
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the work that has gone on to try to analyze the many, many |
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issues surrounding health care and come forward with |
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workable solutions. |
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I want to applaud the actions taken today by
the |
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Department and the Federal Trade Commission in issuing |
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these guidelines. They are the result of a lot of hard |
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work by Anne Bingaman and Janet Steiger, by Senator |
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Metzenbaum and Congressman Jack Brooks, and their very |
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dedicated staffs. |
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These guidelines represent an important first |
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step for an industry that is facing rapid change. They |
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are a good example of what health care reform is all |
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about. They will help lower costs, maintain high quality, |
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and knock down the barriers to collaboration that |
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unfortunately are too common in our present system. |
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The Attorney General has spelled out what the |
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problem is. We have a complex and inefficient system that |
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keeps doctors and hospitals from spending their money |
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wisely and drives up the prices that consumers and the |
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Government have to pay. Over time, the actions we take |
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will turn this system the right side up. |
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Instead of requiring every hospital or doctor's |
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office to buy the same expensive piece of equipment, these |
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guidelines will allow them to share that equipment. They |
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allow physicians to get together to control costs, and |
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they allow mergers that are competitive and save consumers |
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money. |
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I have learned many, many things about our |
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health care system in the past months, but one of the |
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first lessons that I learned came to me from traveling |
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around the country, when a member of a hospital board or a |
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physician or a hospital administrator would come and, with |
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real poignancy say, we want to help, but we cannot even |
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have a meeting to talk about how we could have one piece |
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of expensive equipment in our community instead of all of |
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us feeling compelled to buy one for ourselves because our |
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lawyers tell us we cannot cooperate. |
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This is not a problem that comes from the |
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Justice Department or the Federal Trade Commission or the |
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Senate or the House. This is a problem that comes from |
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the grassroots of people trying to do a better job to |
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deliver quality health care. |
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These actions are pro-competition, pro- |
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collaboration, and pro-consumer. The results over time |
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will achieve the following positive results: consumers |
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will pay less, equipment will not stand idle, it will be |
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used more frequently, hospitals will save money, the |
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pressure on physicians to order tests to pay for the |
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machinery that they bought in order to be competitive will |
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stop, and the highest quality tests and the latest |
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technology will still be available, and I would argue more |
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readily available, to those who need them. |
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I also want to thank the Attorney General and |
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the Justice Department for their ongoing and accelerating |
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efforts to crack down on the problem of health care fraud |
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and abuse. As the Nation's health care bills have |
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mounted, consumers and businesses have paid a high price. |
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The crimes have grown more sophisticated and more |
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outrageous, and every time someone rips off the health |
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insurance system, the public, the private insurers, all of |
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us pay more. |
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Settlements like the ones the Department has |
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recently achieved on the West Coast, and the strong |
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measures that we will have more to say about next week |
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send a strong warning to those who would steal from the |
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American taxpayers and permit the kind of health care |
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fraud that has a damaging impact on all of us, no matter |
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who we are. |
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We intend to make it very clear, health care |
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fraud will not go unpunished. In a reformed health care |
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system there will no longer be any room for the kind of |
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games that for too long have permitted the kind of fraud |
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and abuse that we are cracking down on now. |
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This is a message we must send to every American |
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who has health insurance and pays too much, and to every |
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American who does not know if they will be able to afford |
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their coverage next month or next year. |
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It's a great pleasure for me to stand here
in |
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this department with this team that has been assembled to |
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take these steps on the road to getting health care costs |
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under control and providing health care security for every |
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American. |
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This is the kind of example of thoughtful, |
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careful work that leads to a positive result that will |
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translate into better health care for Americans in the |
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years to come. |
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Thank you very much. |
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(Applause.) |
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GENERAL RENO: The leader of the Antitrust |
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Division is Anne Bingaman, one of the most dedicated and |
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vigorous lawyers that I have met in Washington. It is a |
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true pleasure to have her on this team in the Department |
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of Justice. |
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She has been working with the really dedicated |
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people in that division, people who care so much about |
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antitrust enforcement. She is going to remain to answer |
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questions, but she might have a few words for us now. |
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Anne. |
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(Applause.) |
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ASSISTANT ATTORNEY GENERAL ANNE K. BINGAMAN |
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IN CHARGE OF THE DEPARTMENT OF JUSTICE'S ANTITRUST DIVISION |
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MS. BINGAMAN: Let me just speak to you briefly, |
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because Chairman Steiger and I will remain to answer |
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detailed questions on the guidelines. |
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Let me just emphasize the extraordinary |
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cooperation and coordination and consultation that went on |
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jointly between the Federal Trade Commission and the |
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Department of Justice in developing and issuing its |
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guidelines. It is, I believe, almost unprecedented. It |
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has been a wonderful experience. |
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It is exactly the kind of responsible and |
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responsive Government that we need to have, because we |
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recognize -- the Federal Trade Commission recognizes and |
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the Department of Justice recognizes there is a problem |
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out there. People in small communities honestly didn't |
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know what the rules were. |
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As the First Lady said, you hear it over and |
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over again. The rules were there, but they were in |
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speeches and letters and business review advisories going |
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back over a 10-year period, so that if you were a partner |
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in a major New York or Washington law firm, you knew the |
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letter issued February 18, 1985 covered such-and-such, but |
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if you were somebody in Santa Fe, New Mexico, my home |
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town, you may not know there were such letters, and yet |
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you had to give advice to your local hospital or your |
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local group of physicians as a lawyer, or if you're on a |
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hospital board, or a doctor trying to comply, you had to |
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understand what the rules were. |
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So this is an effort to clarify, to state in
one |
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simple place what those rules are, and to commit to |
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ongoing review in order to provide responsible help to the |
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health care community throughout this country in a time of |
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enormous change which needs to occur, and we want to do |
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our part. |
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I want to thank Chairman Steiger and the Federal |
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Trade Commission so sincerely for their enormous help. It |
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has been a great pleasure working with them, and we look |
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forward to many months and years of cooperation. |
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Thank you. |
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(Applause.) |
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ATTORNEY GENERAL RENO: Chairman Steiger has
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an example for us all in terms of cooperative effort |
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between Government agencies that are concerned with the |
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same jurisdiction and the same subject matter. It has |
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been a wonderful opportunity for us to work with the |
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Commission and with Chairman Steiger, and it is a great |
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privilege to have her here today. |
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(Applause.) |
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FEDERAL TRADE COMMISSION CHAIRMAN JANET D.
STEIGER |
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CHAIRMAN STEIGER: Thank you. I also will be |
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brief, since we are going to take 20 questions afterwards. |
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But our thanks at the Commission for the leadership of the |
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First Lady, and the Attorney General, and, of course, Anne |
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Bingaman, for their assistance to us in this effort. And |
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we cannot leave out the Senator and the Chairman, who were |
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always resources for us in these efforts. |
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I just want to stress that the policy statements |
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do represent a collaborative effort by the two Federal |
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agencies who are entrusted with the responsibility for |
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antitrust enforcement. They also represent a bipartisan |
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effort. Sound antitrust laws is not a partisan matter. |
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The First Lady has noted that guidance is needed |
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in how the antitrust laws do apply to the field of health |
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care. Health care is vital not only to our physical |
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wellbeing as people, but to our economic wellbeing as a |
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county. And antitrust enforcement has historically played |
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a very important role in protecting competition in the |
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health-care markets, and in lowering the cost of health |
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care for consumers. |
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But antitrust is, as Anne Bingaman said, a
very |
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complicated area of the law, particularly as it applies to |
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the field of health care. This complexity has given rise, |
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we believe, to the need to tell people with clarity what |
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kinds of activities are and are not permissible, so that |
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legitimate conduct is not deterred, conduct that is |
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beneficial to consumers. That that conduct is not |
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deterred by a fear of antitrust enforcement that is not in |
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order. |
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We at FTC are very proud of our record in the |
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health-care area, of our record of challenging barriers to |
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the development of HMO's and other innovative health-care |
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delivery systems. And we are proud of our record of |
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attacking conspiracies to raise prices to consumers. |
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Sound antitrust enforcement efforts of this type should |
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and will continue. But at the same time it is important |
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to attest there are such as those we took today, to better |
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explain our enforcement intentions so that |
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misunderstandings about those intentions do not inhibit |
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activities that benefit consumers. |
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I owe a special debt of thanks to my colleagues |
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at the Federal Trade Commission, Commissioners Azcuenaga, |
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Starek, and Yao. And I must add a real special thanks are |
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due to Commissioners Yao, who is here with us today, and |
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Starek. They took the very heavy work in the organization |
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and coordination of our efforts at the FTC. |
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Thank you. |
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(Applause.) |
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ATTORNEY GENERAL RENO: Senator Howard |
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Metzenbaum is the distinguished Chairman of the Senate |
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Judiciary Committee's subcommittee which deals with |
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antitrust issues. No person in Washington is more |
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concerned with the vigorous enforcement and fair |
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enforcement of the antitrust laws of this Nation, and we |
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are delighted that he cut short a meeting on the Hill to |
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be with us today. |
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Senator, welcome. |
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(Applause.) |
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SENATOR HOWARD METZENBAUM, DEMOCRAT, OHIO |
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SENATOR METZENBAUM: Jack, I hope you get the |
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message. Because it is a tremendous sense of excitement |
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that I feel that here are we two males, we, while these |
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four wonderful women provided leadership. Government has |
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changed in Washington and I am all for it, and I couldn't |
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be more pleased about it. |
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(Applause.) |
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SENATOR METZENBAUM: I am also excited about
the |
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fact that we are going to solve a problem in the antitrust |
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field without changing one word, one comma, or one |
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semi-colon of the antitrust laws. And there is no need. |
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Our antitrust laws are not to blame for the high cost of |
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health care. They have protected consumers from price |
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fixing and gouging. In fact, the antitrust laws have |
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never blocked a pro-competitive health care deal. |
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We are here today to clear up confusion among |
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doctors and hospitals about how these laws apply to them. |
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We want to end their uncertainty. If legitimate confusion |
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about antitrust has slowed down even one cost-cutting |
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merger or joint venture, that is one too many. These |
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policy guidelines are proof positive that we can make our |
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laws work to accommodate businesses when their concerns |
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have logic and merit. |
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I became convinced that the hospitals were |
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looking for clarity, not loopholes, when I chaired a |
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hearing on the subject last March. And I also attended a |
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hearing conducted by Senator Rockefeller where a |
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half-dozen Senators indicated their concerns about the |
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hospitals trying to work together in their local |
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communities, and saying what a great problem it was, that |
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we had to change the antitrust laws. |
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At that time I said we don't have to change
the |
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antitrust laws; we can work this out. And this is the |
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culmination of those efforts, because it has been brought |
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about without changing the antitrust laws by bringing |
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about changed guidelines that spell out what can and can't |
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be done. |
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Together, we began to look for resolution after |
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those meetings. And thanks to the help of the American |
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Hospital Association, they took the extraordinary step of |
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writing the First Lady to win her support for antitrust |
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guidelines for hospitals. I promised the AHA that I would |
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work with the Justice Department and the Federal Trade |
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Commission to come up with guidelines. |
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Today's announcement is a victory for consumers |
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that will speed health-care reform. These measures will |
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help end uncertainty about how the antitrust laws will |
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apply to hospital and physician deals, without creating |
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costly loopholes in those laws that could hurt consumers. |
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They will also help hospitals and doctors to understand |
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the difference between a joint ventures that cuts costs |
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and also benefits the public and a joint venture that is |
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likely to eliminate competition and drive up prices. |
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I hope that we will hear from others in the |
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medical profession who have voiced similar concerns and |
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fears. We can work these problems out together. And |
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thanks to the magnificent leadership of the First Lady, |
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the Attorney General, Janet Reno, and Anne Bingaman and |
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Janet Steiger, we are here today, and this is a victory |
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for the people of this country and I am so pleased to |
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participate in it. |
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Thank you. |
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(Applause.) |
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ATTORNEY GENERAL RENO: You all know Jack Brooks |
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as Chairman of the House Judiciary Committee. He is also |
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one of the most vigorous and most committed people to |
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efforts of full and fair law enforcement at all levels of |
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anybody I have met in Washington, and it is a pleasure to |
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be with him here today. |
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Mr. Chairman. |
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(Applause.) |
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CONGRESSMAN JACK BROOKS, DEMOCRAT, TEXAS |
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REPRESENTATIVE BROOKS: Thank you very much.
I |
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am the last speaker, you'll be happy to know. |
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(Laughter.) |
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REPRESENTATIVE BROOKS: With the appointed of |
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Attorney General Reno, and Assistant Attorney General |
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Bingaman to head up the antitrust division, I have great |
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expectations for competition policy. For 12 years |
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antitrust has languished and was viewed by those in |
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authority as the enemy, not as a guarantor of the small |
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business community and the American consumer. |
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But in the past few months this administration, |
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with the leadership of Anne Bingaman -- I call her Saint |
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Anne or the Coppertone Kid -- has reaffirmed its |
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commitment to our national competition policy, and today |
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is no exception. |
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As the Health-Care Task Force began its work
in |
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earnest this spring, a number of health-care entities, |
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position groups, hospitals, pharmaceutical companies, came |
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seeking relief on the Hill from the antitrust laws. That |
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is, to speak plainly, they came seeking antitrust |
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exemptions. At the Judiciary Committee we are used to |
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hearing such requests. Frankly, we don't believe in many |
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of them and use every effort we have to end the few |
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exemptions that exist now on the books. They are |
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unnecessary. They are harmful even to those who come |
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seeking. |
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At the same time, we must acknowledge that
in |
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the health-care area antitrust uncertainties do exist and |
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need to be addressed in a cooperative manner between |
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enforcers and private parties. There is no substitute for |
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such cooperation. Adversarial legislation and litigation |
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should always be the last resort. |
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And very early in the health-care review |
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process, I met with Mrs. Hillary Rodham Clinton, our First |
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Lady, and discussed my deep-felt view that it was |
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imperative to avoid extreme steps in the antitrust area |
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because of the many unintended consequences that could |
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result in both the short and long term. She listened |
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carefully. She was well versed in the history of |
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importance of a strong antitrust policy in this country. |
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Hers was a nearly overwhelming task, and few would have |
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been up to it. She was. |
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I am very pleased today that the Clinton |
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administration has unveiled a plan, has chosen to reject |
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the exemption route in favor of the clarification route. |
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Already in place, already working now, we are seeing the |
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benefits of such an approach in other critical and |
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strategic industries that are taking advantage of |
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prenotification and consultation for a variety of research |
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and development activities, and now for production joint |
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ventures. |
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I intend to do my share in moving the antitrust |
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section of the health package forward in the coming |
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months. What we are witnessing today as the unveiling of |
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health-care antitrust guidelines is simply good medical |
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technique, opting for preventive medicine rather than |
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radical surgery. And I would say that the two ladies |
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we've got here, these women are not tough -- they are not |
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tough. They are highly intelligent. They are dedicated. |
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They are compassionate. And for that we, in this country, |
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have a lot to be grateful. |
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I want to say I salute the First Lady and the |
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wonderful work of you, Janet, and your organization, and |
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the Justice Department. Thank you. |
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(Applause.) |
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ATTORNEY GENERAL RENO: Ms. Bingaman and |
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Chairman Steiger will now be available to answer your |
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questions. |
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QUESTION: I know that Senator Metzenbaum said |
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that this does not change the antitrust law, but it is my |
2 |
understanding that the White House says this is the first |
3 |
piece of the antitrust package and that legislation is to |
4 |
follow. |
5 |
What legislation will be coming out after this? |
6 |
MS. BINGAMAN: It is not my understanding that |
7 |
there will be antitrust legislation as such. The |
8 |
President's package is not part of what I call this |
9 |
package --at least in the guidelines. But it is my |
10 |
understanding that there will not be antitrust exemptions |
11 |
as legislation in the health care package. These |
12 |
guidelines and policy statements and the very important |
13 |
business review procedure which we commit to there on an |
14 |
ongoing expedited basis. It is certainly, for everyone |
15 |
who has a question, it is my understanding that that is |
16 |
our approach. |
17 |
QUESTION: It is my understanding that Magaziner |
18 |
was saying that -- |
19 |
MS. BINGAMAN: About a week ago I heard people |
20 |
say -- I can't address that. I just can't. And I told |
21 |
you what I know, and I am doing the best I can at this |
22 |
point. |
23 |
QUESTION: Does this mean that the petition
by |
24 |
the drug industry will probably be rejected? And have |
25 |
they asked for any exemptions? |
|
21
|
1 |
QUESTION: Can we have her repeat the question, |
2 |
Anne? |
3 |
MS. BINGAMAN: She said does this mean that
the |
4 |
exemption for the drug industry -- this is the |
5 |
pharmaceutical manufacturers' request -- will be rejected? |
6 |
QUESTION: Yes. |
7 |
MS. BINGAMAN: We have that under advisement
and |
8 |
we expect to act it in the near future. But I would not |
9 |
want to pinpoint it. It does not touch on it actually as |
10 |
such. There is nothing in these policy statements that |
11 |
directly address this -- any issue on that. |
12 |
QUESTION: And can you say in what way -- can |
13 |
you tell us in what way we are going to crack down or beef |
14 |
up your efforts to go after fraud? |
15 |
MS. BINGAMAN: The Civil Division is in charge |
16 |
of fraud. We are the Antitrust Division. And the FTC and |
17 |
the Bureau of Competition does antitrust enforcement. |
18 |
QUESTION: I understand that, but they said,
in |
19 |
concert with this policy, these policy guidelines, there |
20 |
would be a crackdown on fraud. |
21 |
MS. BINGAMAN: I think you are aware of the
San |
22 |
Diego case and the very massive settlement involving |
23 |
fraud. I think what is expected is more emphasis, more |
24 |
looking for cases like that, and more focus on that, in |
25 |
order to prevent high cost due to fraud. That is my |
|
22
|
1 |
understanding. But it is not my direct responsibility. |
2 |
QUESTION: Ms. Bingaman, I have observed in
the |
3 |
past a lot of complaints in Washington about that the |
4 |
Antitrust Division in the last 12 years has largely |
5 |
ignored big corporations and big cases, and gone after the |
6 |
small ones. I trust you are going to change that policy? |
7 |
MS. BINGAMAN: Oh, I tell you the truth, we
are |
8 |
going to enforce the laws as best we can on the facts, as |
9 |
they come before us, period. That is what we are going to |
10 |
do. |
11 |
CHAIRMAN STEIGER: I think we are all committed, |
12 |
and I certainly have been and our Commission has been, in |
13 |
the past four years, to vigorous enforcement of the |
14 |
antitrust laws. And our record will speak for itself on |
15 |
that point. |
16 |
QUESTION: Can you tell us what happened to
the |
17 |
plan on the McCarren-Ferguson exemption for health |
18 |
insurers? |
19 |
MS. BINGAMAN: My understanding -- again, this |
20 |
is not my bailiwick as such, and I think it is in the |
21 |
health care plan, the draft of which is circulating -- is |
22 |
that McCarren-Ferguson will be modified and limited for |
23 |
health care insurers. As some of you may be aware, I |
24 |
testified before Chairman Brooks' committee about June or |
25 |
July on behalf of the administration. We favor limiting |
|
23
|
1 |
the scope of McCarren-Ferguson. |
2 |
We did not testify on the particulars or a |
3 |
particular bill, but we said that we believed the |
4 |
McCarren-Ferguson exemption should be narrowed. |
5 |
QUESTION: May I follow up? But you would need |
6 |
legislation, would you not? |
7 |
MS. BINGAMAN: Yes, yes. Oh, definitely. There |
8 |
would have to be legislation for this. It is just that |
9 |
the particular language -- the particular terms we have |
10 |
not worked through yet. |
11 |
QUESTION: Is that the only legislation |
12 |
involving this? Or have you tried to answer that before? |
13 |
Other than McCarren-Ferguson, are there any other aspects |
14 |
of this that require legislation? |
15 |
MS. BINGAMAN: To my understanding, |
16 |
McCarren-Ferguson is what is affected in the antitrust |
17 |
area. If there is anyone in the room here who has a |
18 |
different understanding, I am not aware of that. |
19 |
QUESTION: You have a 90-day review process. |
20 |
What is it currently, or is there no system for review? |
21 |
CHAIRMAN STEIGER: The Justice Department has, |
22 |
in the past years, promised business review letters that |
23 |
would be finished in 90 days. The Commission, until this |
24 |
policy statement, has not had such a deadline system. And |
25 |
we are now committed to 12 0 days, depending upon the |
|
24 |
1 |
subject matter response. And this is a new commitment for |
2 |
the FTC. |
3 |
MS. BINGAMAN: I might add, it is a new |
4 |
commitment for the Justice Department, too, in that the |
5 |
previous policy was best efforts to answer in 90 days. It |
6 |
was not a binding, flat commitment. Secondly, the |
7 |
previous policy, which still applies to all other |
8 |
industries, is to answer such questions as we believe need |
9 |
to be answered. We retain the discretion, if we think a |
10 |
question is trivial, unimportant and simply not worthy of |
11 |
our limited resources to invest the time, to simply say to |
12 |
the lawyer asking: Take your best shot. We are not doing |
13 |
that in health care. |
14 |
So, for the Justice Department also, this is
a |
15 |
new commitment for the health care industry in that we |
16 |
commit absolutely to answer any question within 9 0 days, |
17 |
and we retain no discretion to not answer any request. We |
18 |
will answer all requests in the interest of certainty and |
19 |
clarity in this area. |
20 |
QUESTION: What about retroactive cases? If |
21 |
there is a merger pending, what are the guidelines? When |
22 |
do they take effect? And what happens to mergers that are |
23 |
now underway with regard to the FTC or Justice Department, |
24 |
or any other agency? |
25 |
CHAIRMAN STEIGER: They do not apply to pending |
|
25 |
1 |
cases. |
2 |
QUESTION: If they are pending as of today? |
3 |
CHAIRMAN STEIGER: That is right. |
4 |
QUESTION: So all of these cases that are now
in |
5 |
the courts, will those have to be worked out? |
6 |
CHAIRMAN STEIGER: If they are in litigation, |
7 |
this does not apply. |
8 |
MS. BINGAMAN: As a practical matter, though,
I |
9 |
might just amplify. I do not think either one of the |
10 |
agencies views these statements as a change from current |
11 |
policy. They are simply a synthesis of the multitude of |
12 |
business review letters, consent decrees and so forth, |
13 |
that it is an effort to simplify. |
14 |
So, as a practical matter, although clearly
the |
15 |
chairman is exactly right, these are effective today, and |
16 |
from this day forward. I am not aware that there would be |
17 |
any practical significance to that. |
18 |
CHAIRMAN STEIGER: I think that is an important |
19 |
point, and I agree with it. |
20 |
QUESTION: Just to clarify. You just said that |
21 |
the 90-day review was new. Is that the only new thing? |
22 |
Is that the only new provision? |
23 |
MS. BINGAMAN: What else is new is the whole |
24 |
concept. There are several new things here. |
25 |
Number one, neither Agency has ever issued
a set |
|
26 |
1 |
of guidelines in a specific industry. That alone is -- in |
2 |
the antitrust world, somewhat earthshaking. We are doing |
3 |
it because of the extreme change, the small markets and |
4 |
what we view as the need for responsiveness. So that is |
5 |
one change. |
6 |
Second, there has never been a policy statement |
7 |
-- certainly not by both Agencies. We have had the |
8 |
business review procedure to particular instances to state |
9 |
the Agency's enforcement intentions and to say this |
10 |
particular transaction, on these facts, would not be |
11 |
challenged by this Agency at this point. What we have |
12 |
never had before is a statement applicable to an industry |
13 |
of what we call antitrust safety zones in these |
14 |
guidelines. |
15 |
These guidelines set up -- they are in fact |
16 |
current enforcement policy, so they are not a change, but |
17 |
it has never been stated this way before. And for many |
18 |
thousands of lawyers and health care professionals out |
19 |
there, enforcement policy can seem like a black box. And |
20 |
so the mere fact that setting out in so many words -- and |
21 |
we call it an antitrust safety zone --if you meet these |
22 |
criteria, absent extraordinary circumstances, neither |
23 |
Agency will challenge your conduct. And so that is new. |
24 |
And then the third -- the time for the |
25 |
commitment. |
|
27 |
1 |
CHAIRMAN STEIGER: I think it is important to |
2 |
stress, as Anne did earlier, that people across this |
3 |
country, hospital administrators and others who face |
4 |
questions of a changing health care landscape, have a |
5 |
place to go. They do not have to go back to see what |
6 |
happened in the 19 85 advisory panel from X or Y. We have |
7 |
put it together for them. But it is a synthesis of |
8 |
current enforcement policy. The very existence of this |
9 |
document is new. |
10 |
QUESTION: Just to follow up on that. In taking |
11 |
this different approach here, didn't you say to yourselves |
12 |
at some point in your policy formulation, Gee, we are |
13 |
going down a new road here, and this might set a precedent |
14 |
in other industries? And what bearing did that have on |
15 |
your final decision? |
16 |
MS. BINGAMAN: Certainly that is a concern. |
17 |
Because everybody wants guidelines, and we have got real |
18 |
work to do and we cannot write guidelines for every single |
19 |
industry in America. We cannot spend all our time doing |
20 |
that. It is an enormous devotion to resources to turn out |
21 |
this document, to feel comfortable with it, and to state |
22 |
publicly this is it. This is what we will and will not |
23 |
do. |
24 |
So, certainly, it was a major issue as to the |
25 |
advisability of issuing industry-specific policy |
|
28 |
1 |
statements. But it was our judgment that in the |
2 |
extraordinary circumstances the health care community |
3 |
faces today, with massive restructuring, changes that are |
4 |
being proposed, the crisis in cost for health care, the |
5 |
enormous uncertainty that small local markets, thousands |
6 |
of them with legitimate questions about what is and is not |
7 |
permissible, all of those factors we thought made this |
8 |
situation unique and worthy of special attention. |
9 |
CHAIRMAN STEIGER: We do not see these |
10 |
particulars anywhere else in the landscape that we are |
11 |
looking at now. |
12 |
QUESTION: Doesn't this legislation put at risk |
13 |
those smaller fringe outfits like MRI's? Won't they end |
14 |
up going out of business if bigger operators in town are |
15 |
allowed to collaborate? |
16 |
MS. BINGAMAN: I do not understand your |
17 |
question. Could you repeat that? |
18 |
QUESTION: What is the effect going to be on |
19 |
some of the smaller operators in town that may not be able |
20 |
to collaborate with a bigger hospital? |
21 |
MS. BINGAMAN: All this does is state what |
22 |
competition policy allows. And competition policy right |
23 |
now, the matter of sharing of expensive equipment, allows |
24 |
hospitals jointly to purchase a piece of equipment if they |
25 |
could not utilize it effectively themselves. In other |
|
29 |
1 |
words, if there is no need in a town for two CAT scan |
2 |
machines, there is only half demand by each hospital for |
3 |
one CAT scan machine in a particular town, the fact is, |
4 |
right now, it is permissible for hospitals to jointly |
5 |
purchase a CAT scan machine and to jointly use it, because |
6 |
it reduces the cost per transaction. And that is pro- |
7 |
competitive and efficient. |
8 |
But people do not understand that. They think |
9 |
that it is an antitrust violation to even speak about |
10 |
purchasing jointly a CAT scan or some other piece of |
11 |
equipment, a helicopter or whatever you want to talk |
12 |
about. And the purpose of these is to clarify the |
13 |
instances in which it is permissible. |
14 |
Now there are also instances in which it is
not |
15 |
permissible. So we have a safety zone, and then we have |
16 |
the rule of reason analysis for instances that do not fall |
17 |
into the safety zone, and then we have the backup business |
18 |
review procedure for anyone in the country who wants to |
19 |
ask us -- Here is my situation, can I or can I not do |
20 |
this? -- and we will respond. |
21 |
CHAIRMAN STEIGER: I would add that neither |
22 |
Agency has ever challenged a joint venture on the purchase |
23 |
of high-tech or expensive hospital machinery. It is |
24 |
clearly within the --as the guidelines indicate --a |
25 |
permissible activity and we do lay that out. But, in |
|
30 |
1 |
spite of the fact that there has never been a challenge, |
2 |
we have been told there is this lingering uncertainty that |
3 |
was chilling effective pro-competitive, pro-consumer |
4 |
choices. And this is what is in the root of the policy. |
5 |
QUESTION: Chairman Steiger, one of your |
6 |
commissioners, Deborah Owen, dissented, and contended that |
7 |
this is special interest antitrust exemption and that you |
8 |
should do it, if you do it at all, through legislation, |
9 |
not through unilateral actions such as this. Could you |
10 |
speak to that point? |
11 |
CHAIRMAN STEIGER: Well, I think Howard |
12 |
Metzenbaum said it very clearly, these are not exemptions. |
13 |
These are statements of current enforcement policy. They |
14 |
are the type of guidance that I believe we do in this |
15 |
particular extremely dynamic and very fractionalized -- in |
16 |
the sense of markets -- industry. I do not think |
17 |
legislation is needed. I do not think there are any |
18 |
exemptions that we are talking about. |
19 |
We are talking about laying out groundwork
so |
20 |
that people out across this country know what is clearly |
21 |
permissible. So my answer is no. |
22 |
MR. STERN: There are about three or four hands. |
23 |
I think we will cut it off before we get too heated. |
24 |
Over here. |
25 |
QUESTION: You said that these are not legal |
|
31 |
1 |
exemptions. However, you noted that the FTC case which |
2 |
started in 1989 is still in litigation would fall into the |
3 |
safety zone created here. In light of that, would a case |
4 |
like that be brought again? And, if not, will these |
5 |
after-the-fact, de facto exemptions be antitrust? |
6 |
CHAIRMAN STEIGER: I would note that -- you
are |
7 |
correct -- that publicly they indicate that the |
8 |
statistical parameters on that fall in the safety zone. I |
9 |
would only add that, were a case like that to come to bat, |
10 |
we might still look at it to see if there were |
11 |
extraordinary circumstances in an area in a case where we |
12 |
would normally not or very rarely take an enforcement |
13 |
area. |
14 |
I cannot comment as to whether such |
15 |
circumstances exist. We will decide it under section 7 of |
16 |
the Clayton Act. But those challenges have been so rare. |
17 |
And the rarity of them I think confirms our high degree of |
18 |
comfort with this safety zone. |
19 |
QUESTION: I am still not exactly clear. Are |
20 |
these safety zones new or have they already existed but |
21 |
there just never was a general statement explaining that? |
22 |
CHAIRMAN STEIGER: They are a synthesis of our |
23 |
experience -- the economic literature and our own |
24 |
experience over time. There are two problems: a census |
25 |
of 40 patients per day over a three-year period. Our |
|
32 |
1 |
experience reflect our experiences that these are probably |
2 |
not competitive situations. They are not competitive |
3 |
hospitals. They are not realizing the efficiencies, and |
4 |
probably a merger -- most probably a merger in these areas |
5 |
would not pose consumer injury or an antitrust problem. |
6 |
QUESTION: So you are saying, I think, that
you |
7 |
are not creating any new safe harbors here, you are just |
8 |
lighting them better and letting them come in faster? |
9 |
CHAIRMAN STEIGER: We are basically synthesizing |
10 |
what we know in this area to the best of our ability. And |
11 |
there might be other measures that could be used. |
12 |
QUESTION: In the example the assistant |
13 |
secretary used about two hospitals sharing a CAT scan or |
14 |
buying a CAT scan jointly, if those two hospitals then |
15 |
decide to move to set price to use that CAT scan, would |
16 |
you then challenge that? |
17 |
MS. BINGAMAN: If the two hospitals do what? |
18 |
QUESTION: Decide jointly to set the price for |
19 |
the use of that CAT scan. Would that run afoul of the |
20 |
antitrust laws? |
21 |
MS. BINGAMAN: Under my understanding is that |
22 |
under these guidelines they can jointly market. And I |
23 |
believe that means they can jointly price. And so the |
24 |
answer is no. |
25 |
QUESTION: Well, how does that enhance |
|
33 |
1 |
competition if they can jointly market? |
2 |
MS. BINGAMAN: That is what is going on right |
3 |
now. It enhances competition this light. It keeps each |
4 |
of them from separately buying a CAT scan. And it keeps |
5 |
each of them from having to price it double, because in |
6 |
order to recover fully on half as many procedures of a |
7 |
given piece of extremely expensive equipment, honestly the |
8 |
price has to be much, much higher than it would be if you |
9 |
could cut it by usage. |
10 |
And so if those two hospitals have the |
11 |
equipment, there may be a hospital across town that has a |
12 |
different piece of equipment that competes with it. In |
13 |
other words, you can't look at these two hospitals in a |
14 |
vacuum. In most metropolitan areas there are many, many |
15 |
hospitals, and there can be many of these arrangements |
16 |
going on. And you can have a joint venture here competing |
17 |
with a joint venture there, or with a single hospital that |
18 |
has a lot of procedures on its equipment. |
19 |
QUESTION: Well, can't you separate joint |
20 |
purchasing of equipment from joint pricing of the service? |
21 |
MS. BINGAMAN: That could have been done. It |
22 |
could have been done, but it was not. |
23 |
CHAIRMAN STEIGER: I think the guides make it |
24 |
clear that the same violations remain. Price fixing is |
25 |
price fixing. I think that if you read the specific |
|
34 |
1 |
policy statement on this joint venture in purchasing it |
2 |
does answer the question. |
3 |
MR. STERN: We will take a last question from |
4 |
the lady in orange. |
5 |
QUESTION: What is the impact of these |
6 |
guidelines on the HHS safe harbor provisions, or is there |
7 |
any impact? |
8 |
MS. BINGAMAN: I honestly cannot answer that.
I |
9 |
do not know. I am not aware of any. I would give you an |
10 |
answer if I knew the answer, but I do not. I honestly |
11 |
cannot. |
12 |
MR. STERN: Thank you for coming. |
13 |
(Whereupon, at 11:18 a.m., the press conference |
14 |
was concluded.) |
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18 |
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