I-94 is the largely industrial highway linking Chicago and Detroit. Recent public and private actions assert price fixing activity in both cities. In metropolitan Chicago Advocate Health Partners, a “super physician hospital organization,” resolved its FTC investigation for price fixing and refusal to deal by agreeing to a proposed order which essentially prohibits using further negotiation with health plans on behalf of approximately 3,000 physicians in the area. See In Re Advocate Health Partners, FTC File No. 0310021 (12/29/06). Advocate Health Partners apparently undertook to negotiate private contracts with health insurers on behalf of a network of related PHO organizations which included pods of independent physicians and a subsidiary corporation of the Advocate Health Care Network Hospital System.
The draft FTC Complaint averred that Advocate Health Partners and related partners were, “orchestrating, implementing and participating in agreements among physicians to fix prices and other terms on which they would deal and refuse to deal with health plans except on collectively determined terms” in violation of §5 of the Federal Trade Commission Act. One of the health plans that the PHO’s refused to deal with unless they agreed to collective terms, had independent physicians compensated at rates 20 to 30% lower than the rates demanded by Advocate/Health Partners. The FTC agreed to let Advocate Health Partners continue to work its clinical integration plan presumably to some day permit collective negotiations if sufficient operational efficiencies are introduced to duck the price fixing problem.
Further to the east in Detroit, a number of nurses filed a class action suit against a group of Detroit Metropolitan hospitals alleging that the hospitals shared private information regarding nursing compensation and conspired to keep nursing salaries low despite obvious nursing shortages.
In Cason Miranda v. Detroit Medical Center, et. al., No. 2. 06 -CV–15601, E.D. Michigan, the plaintiffs assert that the Defendant hospitals match nursing salaries with each other through trade show communications, phone conversations and surveys. The Defendant hospitals employ fifty-five percent of the registered nurses in the Detroit area.
Must be something in the water up there in the Great Lakes.
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