The Role of Competition in the Market for Health Care (Panel Transcript)
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CHAPTER XI
THE ROLE OF COMPETITION IN THE MARKET
FOR HEALTH CARE (PANEL TRANSCRIPT)
Moderator
Toby G. Singer
Jones Day, Washington, DC
Panelists
Judith Feder
Georgetown University, Washington, DC
Thomas Greaney
St. Louis University, St. Louis, MO
David Hyman
University of Illinois, Champaign, IL
G. Mike Mikan
UnitedHealth Group, Minnetonka, MN
MR. WILSON: Toby Singer is our moderator for the panel on health
care. Toby is a partner at Jones Day and one of the leading health care
antitrust lawyers in the c ountry. She has chaired our Section‘s H ealth
Care Committee and is currently chairing the Antitrust Practice Group of
the American Health Lawyers Association.
MS. SINGER: I will start by introducing the panelists. Our first
speaker is Mike Mikan. Mike is the Executive Vice President and Chief
Financial Officer of UnitedHealth Group. Mike comes to us with a
broad range of practical experience and expertise in health care issues.
He is responsible for mergers and acquisitions at United, as well as
overall responsibility for provider contracting. He has been with United
since 1998 and has a degree from the University of St. Thomas in St.
Paul, Minnesota.
After Mike, Tim Greaney will speak. Tim is the Chester A. Myers
Professor of Law and Director of the Center for Health Law Studies at
the St. Louis University School of Law. He is the co-author of the
nation‘s leading health la w casebook and is one of the country‘s l eading
experts in health care antitrust. Before he went into academia, Tim was
at the Department of Justice, where he was Assistant Chief of the section
that was responsible for supervising the health care antitrust work.
282 Competition as Public Policy
David Hyman will speak next. David is the Maria L. Corman
Professor of Law and Professor of Medicine at the University of Illinois.
He directs the Epstein Program in Health Law and Policy and focuses on
health care policy and law issues in his teaching and his writings. Like
Tim, he is an alumnus of the antitrust agencies. He was Special Counsel
at the Federal Trade Commission (FTC), where he was responsible in
large part for the report on health care competition issues that the FTC
and the Department of Justice (DOJ) issued in 2004.
Our final speaker is Judy Feder. Judy is Professor and Dean of the
Georgetown Public Policy Institute and was a Democratic nominee for
Congress in Virginia several years ago. Judy brings a lot of expertise to
health care policy issues. She is a widely published scholar and has been
with a number of organizations, including the Brookings Institution.
Judy is an elected member of the Institute of Medicine, the National
Academy of Public Administration, and the National Academy of Social
Insurance. She is a political scientist by training, and therefore brings a
somewhat different policy bent to this discussion than the other speakers.
MR. MIKAN: Good afternoon.
I woke up this morning and I was getting my daughter ready for
school, who‘s a first grader. She said, ―Dad, what are you going to do
today?‖ I said, ―I‘m going to go speak to a bunch of lawyers.‖ She said,
―Are they going to be nice to you?‖ I immediately was taken aback and I
was wondering: ―Why would my daughter say ‗are they going to be nice
to me?‘‖ I quickly realized she has witnessed s ome stress in our
household over the last three years, having taken over as the Chief
Financial Officer of UnitedHealth Group just after a large governance
scandal related to stock option matters. I‘ve had the opportunity to speak
in front of many attorneys -state attorneys general, the SEC, and a lot of
plaintiff‘s attorneys - and I guess she has probably seen some stress on
my face. So I thought it‘s probably a bona fide question.
But then, I also r eflected on this and quickly realized that this
probably is the friendliest crowd of attorneys I have spoken t o in the last
three years. So I concluded and said, ―Relatively speaking, I am sure
they will be nice.‖
I really do appreciate the opportunity to speak here this afternoon. In
February 2006, the Robert Wood Johnson Foundation issued a report
based on a study they did that demonstrated that the last wave of hospital
mergers increased prices by some 40 percent. Recently, the American
Hospital Association (AHA) wrote a letter to the Assistant Attorney
General for the Antitrust Division, Ms. Varney, indicating that health
plan mergers over the last ten years are the reason premiums are
Role of Competition in the Market for Health Care (Pa nel Transcript) 283
increasing at the alarming levels that they are today. Both sides argue
that most urban markets are highly concentrated.
There is no question there is a debate here and I have a very strong
opinion about it. But given all of the things that are happening right now
in the marketplace, I will focus my remarks on what I consider to be the
real debate in health care today.
The argument I‘m going to try to make this afternoon is quite simple.
We believe that competition drives innovation, and innovation will
ultimately be the critical element in successfully reforming and
modernizing the health care system. Private sector innovation
continually creates sustainable health care solutions that improve access,
quality, affordability, and simplicity in the health care system.
For just a moment, let us consider what health care might look like
without private sector competition. Our experience suggests that without
competition, there would be significantly higher costs than there are
today, as unbelievable as that might sound; limited transparency on costs
and quality of care; minimal patient choice or consumer participation; no
consumer-directed benefits; significantly less research; fewer new
treatments, drugs, and devices; and significantly less technology to
support operations and information connectivity than there is today.
Obviously, those are all debatable, but not entirely speculative.
The 40-plus-year history of Medicare is an instructive and concrete
example. Arguably, there have been only three fundamental innovations
on the benefit side of Medicare since Congress enacted it in 1965. Those
three innovations were the introduction of Medicare supplement plans,
Medicare Advantage plans, and the Part D drug benefit. And all three of
these innovations depended on partnership with the private sector to
execute.
Over the same time period, private enterprises like UnitedHealth
Group have continued to evolve and innovate, driven by the forces of
competition to deliver ever-increasing levels of value to the health care
system, our customers, and consumers. Let me give you a few examples
of competition-driven innovation from our enterprise.
Through our premium designation program, we identify as many as
100,000 physicians who consistently produce superior overall clinical
care for patients at up to 20 percent lower cost levels overall. We guide
people to these providers and reward these physicians and other health
care professionals and facilities for their effectiveness and efficiency.
Our premium networks integrate evidence-based care management
programs across 20 medical specialties and report on care quality and
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