S.M. Oliva's piece on antitrust actions against physician associations ("Doctors' Orders," December) includes some anecdotes that show it is costly and consuming to fight the Federal Trade Commission. That is no surprise. But I saw no arguments supporting Oliva's statement that enforcement against physicians collectively negotiating health plan contract terms, including payment rates, "will do nothing to reduce rising health care prices, while serving to dampen competition."
As a representative for health plans in physician contract negotiations for nearly two decades, I have worked with dozens of independent physician associations (IPAs). With few exceptions, the primary, if not sole, purpose of the IPA has been to secure terms for the physician members more favorable than those that the physicians could secure independently. The most important of these terms is the reimbursement rate from the health plan. If the benchmark for success is higher fees, the result is certainly increased health care costs to health plans, employers, and patients.
Oliva reports that the FTC and Justice Department have prosecuted 36 IPAs in the last decade. Thirty-six prosecutions out of the thousands of such associations nationally is disturbing for how meager the number is, especially given that even Oliva seems to acknowledge the purpose of the associations is to bargain collectively.
Distorted market forces from a reliance on third-party financing are not remedied by eliminating or failing to enforce antitrust regulations on health care providers. One of the primary market distortions from third-party financing is that patients are insulated from the true costs of medical care. This distortion makes collective bargaining by physicians to increase payments more likely to succeed, because patients are oblivious to the outcome of negotiations between physicians and health plans beyond simply whether or not their physician participates in a particular health plan. Price fixing would not be tolerated by patients if they were paying directly for the medical services, and it would be foolish and irresponsible for public policy to allow it simply because it is the big, bad HMO contracting with the physician.
Forced to Be Free
After taking issue with Ayaan Hirsi Ali for calling for the abolition of Muslim schools in the United States, Jesse Walker writes that "at least she speaks with direct experience of the ugly side of Islam" ("Forced to Be Free," November). I don't dispute that Hirsi Ali's life experiences have been horrific, but she has almost zero firsthand experience of Muslim life in the U.S., as distinct from Muslim life in East Africa, Saudi Arabia, and Holland. That lack of experience has not prevented her from offering extravagant generalizations about the nature of Muslim-American mosques, schools, and families, a contradiction lost on both Hirsi Ali and her defenders.
Co-Editor, Reason Papers
CORRECTION: "The War on Cameras" (January) referred to a police video taken at the Belmont Stakes. It was actually taken at the Preakness Stakes.