CASE STUDY

Case Study



Case Study

The solution includes an analysis of a complex scenario in which a Manage Care Organization (MCO) wants to recruit a prestigious hospital in the area as part of its participant providers. Problems in the negotiations arise when the hospital request for exclusivity on two specialty services conflicts with the obligation the MCO has to protect the best interest of the people participating in the manage care. A detailed discussion of possible violations of the antitrust act by such a contrast and the power of other interested parties in this contract is included.

ABC insurance company should charge lower prices or offer higher quality products in order to be successful in gaining consumers' business. MCO operate on a reduced-fee schedule, offering lower fees for patients who seek care from a "preferred provider," who functions both as a primary care doctor and as a gatekeeper for such tasks as specialist referrals. Both use "networks" of physicians and health care providers. The standard duty to provide medical care applies to physicians in these networks, but new issues arise regarding the payment or reimbursement of expenses. Some managed-care plans offer limited "out-of-network" benefits, some offer none at all(Areeda, 1997).

Verde Greene Hospital should focuses on a firm's behavior, not its objectives. Therefore, nonprofit status and similar hallmarks of good intentions are largely irrelevant to antitrust analysis. Verde Greene Hospital scan follow whatever "objective function" they like (maximization of profits, or output, or quality), as long as each enterprise pursues its objectives independently and avoids becoming a monopoly. Antitrust leaves it to the market to determine whether the achievements of a hospital-firm have social value(Hammer, 2007). The historical rule for hospitals is that they must act reasonably in their decisions to treat patients. Hospitals must acknowledge that a common practice of providing treatment to all emergency patients creates among members of a community an expectation that care will be provided whenever a person seeks care in an "unmistakable emergency." Seeking alternative care in a time-sensitive emergency situation could result in avoidable permanent injury or death, so it is not surprising that hospitals are held to a more flexible "reasonable duty" standard in their admission of patients for treatment. From an antitrust perspective, hospitals are simply business firms organized to provide medical services. Undeniably, these services involve complicated combinations of physical facilities, advanced technology, and specialized human capital. However, modern antitrust law focuses on ...