“People don’t like not having a choice, and now, thanks to the DOJ settlement, they’ll have more options for care.”


• Using agreements with commercial health insurers that improperly in- hibit insurers from contracting with United Regional’s competitors,


• Conditioning the prices or discounts it offers to commercial health insurers based on whether those insurers con- tract with other health care providers,


• Inhibiting insurers from entering into agreements with United Regional’s ri- vals, and


• Taking any retaliatory actions against an insurer that signs an agreement with a rival facility.


ing practices of Texas’ health care provid- ers,” he said. “The government examines whether hospitals and other providers of health services are able to balance the evils of anticompetitive harms — an in- crease in prices and a decrease in qual- ity of care — against the efficiencies that result from the economies of scale.”


Contracts catch DOJ’s attention In 1997, Wichita General Hospital and Bethania Regional Health Care Center — then the only general acute care hospi- tals in Wichita Falls — merged to form United Regional Health Care System. According to the complaint, since the merger, United Regional has dominated the sale of inpatient hospital services and outpatient surgical services to com- mercial health insurers in the area. “All health insurance companies in


the relevant geographic market consider United Regional a ‘must-have’ hospital for health plans because it is by far the largest hospital in the region and the only local provider of certain essential services,” the complaint states. The complaint maintains that as Unit-


ed Regional’s prices for services have in- creased, it has become “one of the most expensive hospitals in Texas.” United Regional’s share of general


acute care inpatient hospital services is about 90 percent, and its share of out- patient surgical services is more than 65 percent, according to the government.


46 TEXAS MEDICINE November 2011


The DOJ reports United Regional had net patient revenues of approximately $265 million for 2009.


In fact, the complaint says commer- cial health insurers’ payments for inpa- tient hospital services at United Regional are at least 50 percent higher than av- erage prices paid in seven other com- parable Texas cities. When comparing United Regional’s average per-day rate for inpatient services sold to commercial health insurers to that of Kell West, the complaint says United Regional’s rate is about 70 percent higher. Dr. Myers is pleased with the DOJ’s settlement with United Regional. He says since the settlement announce- ment, Kell West was to contract with HealthSmart and CIGNA. At press time, he was talking to UnitedHealthcare and Aetna about contracting with them. Assistant Attorney General Christine


Varney, who’s in charge of the DOJ’s Antitrust Division said in a press release, “Unfettered competition among hospitals is vital to ensuring that patients receive high-quality, low-cost health care.” She added the proposed settlement “pre- vents a dominant hospital from using its market power to harm consumers by undermining its competitors’ ability to compete in the marketplace.” The proposed settlement, which would be in effect for seven years, re- stores lost competition by prohibiting United Regional from:


United Regional’s exclusionary con- tracts were “in direct response to the competitive threat presented by Kell West, the North Texas Surgi-Center, and other local outpatient surgical facilities to United Regional’s monopoly position in the Wichita Falls MSA,” the complaint alleges.


The North Texas Surgi-Center was


open from 1985 to 2008. The complaint says United Regional’s exclusionary con- tracts prevented the facility from partici- pating in some commercial health insur- ers’ networks. To read the DOJ complaint, competi- tive impact statement, and proposed fi- nal judgment in the Federal Register, visit http://federalregister.gov/a/2011-5529. Texas Medicine attempted to reach a number of Wichita Falls physicians at health care facilities that compete with United Regional, but they declined to be interviewed.


Settlement would restore patient choice According to the government, United Re- gional’s exclusionary contracts increased prices and reduced quality competition in three ways:


1. The exclusionary contracts likely de- layed and prevented expansion and entry of competitors.


2. The exclusionary contracts likely have limited price competition for patients who select a hospital based on price and out-of-pocket expenses.


3. The exclusionary contracts likely have reduced quality competition between United Regional and its competitors.


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