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antitrust, efficiencies, market failure, collusion, managed care


The need to evaluate the competitive consequences of cooperation among rivals has long posed a dilemma for antitrust enforcement. Collaboration can reduce rivalry, raise prices and otherwise reduce consumer welfare; at the same time cooperation among rivals carries the promise of creating cost savings, correcting market failures and producing other benefits. In many cases antitrust doctrine requires a balancing of the positive and negative effects of coordination. In health care, federal antitrust enforcement agencies have increasingly turned to regulatory tools including policy statements, advisory opinions, speeches and regulatory decrees settling cases to strike this balance. However, the agencies have paid insufficient attention to the complexities inherent in making these tradeoffs and would be well advised to adopt structured inquiries into efficiencies defenses and related issues.