Document Type
Article
Publication Date
1-2004
Journal Title
Antitrust Law Journal
ISSN
0003-6056
Abstract
The article is organized as follows. Part I returns to the source, explaining the controversy in Kartell, examining Breyer's opinion, and summarizing its impact on other courts. Part II looks at Kartell through the lens of classic monopsony theory involving suppliers, producers, and consumers, and focuses on the opinion's oversimplification of the relationship between health insurers and insured individuals. It further considers whether lower input prices result in lower consumer prices in the endproduct market, and, therefore, whether monopsony power can be welfare-enhancing. Part III evaluates Kartell's disregard of other important principal-agent problems in health care that arguably influence the welfare analysis of insurer conduct. It explores the degree to which group insurers stand in the shoes of individual consumers and the implications of non-insurer agency relationships, such as between physicians and patients. Part IV seeks to explain Kartell's blind spots in regulatory terms and evaluates the implications of major changes in the structure and regulation of health insurance since 1980. The article contends that the reach and substantive content of antitrust law depend upon the regulatory environment in which alleged monopsony power is exercised, and asserts an important role for antitrust courts in the future.
First Page
949
Last Page
988
Num Pages
40
Volume Number
71
Issue Number
3
Publisher
American Bar Association
Recommended Citation
Peter J. Hammer & William M. Sage,
Monopsony as an Agency and Regulatory Problem in Health Care,
71
Antitrust L.J.
949
(2004).
Available at:
https://scholarship.law.tamu.edu/facscholar/1738