Dive Brief:
- A new analysis suggests that in cases involving medical practices, estimation of damages should consider the cost of providers delivering greater quantities medical services as well as their setting higher prices.
- The analysis, which was performed by researchers from American University and Greylock McKinnon Associates, based their analysis on a class action suit involving a Marshfield, Wis. Clinic, which at the time was one of the largest private multi-specialty groups in the country.
- The researchers examined 40 million insurance claims submitted to Blue Cross Blue Shield by all subscribers living in Wisconsin from 1988 to 1995. They concluded that increased use of medical services drove nearly half of the 10% rise in per-person spending in several communities involved in the lawsuit.
Dive Insight:
When a provider is accused of illegal anti-competitive conduct, especially in cases where a service intensive practice style is part of their competitive strategy, methods of estimating damages should also include whether increased quantities of services led to monetary losses experienced by consumers and health insurers, researchers said. This makes sense. While service intensive care is not necessarily a bad thing, it does intensify the damage caused by anti-competitive activity. It will be interesting to see whether this analysis affects damage levels assessed in future antitrust cases aimed at physician practices.