The Federal Trade Commission has issued an advisory opinion that a proposed arrangement between a 280-physician group and Norman (Okla.) Regional Health System would not prompt antitrust challenges.
Norman Physician Hospital Organization was founded in 1994 by Norman Physicians Association and Norman Regional Health, which is a public system. Today, the PHO includes roughly 280 physicians in 38 specialties, as well as physicians affiliated with the health system. The PHO has proposed a new clinically integrated organizational structure, which prompted its request for an FTC advisory opinion.
The new structure includes the development and adherence to clinical guidelines, a new electronic medical record and health IT platform and newly created committees for quality improvement and "specialty advisory." As part of its new structure, Norman PHO will also operate as a non-exclusive network. Participating physicians will be free to contract independently of Norman PHO with any payor that chooses not to contract with the network.
The FTC emphasized this non-exclusive arrangement in its advisory opinion: "Neither the network nor its participating providers will seek to influence any other participant's independent contracting intentions or strategies, or otherwise confront any payor with the group's aggregate bargaining power."
Interestingly, the FTC green-lighted the arrangement even though Norman PHO states that it cannot currently "'quantify…the likely overall efficiency benefits of its proposed program, or specify how overall cost or quality efficiency gains will be measured,'" according to the opinion.
The FTC said that "Norman PHO's operations will not involve horizontal agreements among competing providers of inpatient hospital services, or outpatient hospital and ambulatory care services, because Norman Regional Health System is the only provider of such services that will participate in the network," according to the opinion. Thus, the FTC ruled that the arrangement will not reduce existing competition.
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Norman Physician Hospital Organization was founded in 1994 by Norman Physicians Association and Norman Regional Health, which is a public system. Today, the PHO includes roughly 280 physicians in 38 specialties, as well as physicians affiliated with the health system. The PHO has proposed a new clinically integrated organizational structure, which prompted its request for an FTC advisory opinion.
The new structure includes the development and adherence to clinical guidelines, a new electronic medical record and health IT platform and newly created committees for quality improvement and "specialty advisory." As part of its new structure, Norman PHO will also operate as a non-exclusive network. Participating physicians will be free to contract independently of Norman PHO with any payor that chooses not to contract with the network.
The FTC emphasized this non-exclusive arrangement in its advisory opinion: "Neither the network nor its participating providers will seek to influence any other participant's independent contracting intentions or strategies, or otherwise confront any payor with the group's aggregate bargaining power."
Interestingly, the FTC green-lighted the arrangement even though Norman PHO states that it cannot currently "'quantify…the likely overall efficiency benefits of its proposed program, or specify how overall cost or quality efficiency gains will be measured,'" according to the opinion.
The FTC said that "Norman PHO's operations will not involve horizontal agreements among competing providers of inpatient hospital services, or outpatient hospital and ambulatory care services, because Norman Regional Health System is the only provider of such services that will participate in the network," according to the opinion. Thus, the FTC ruled that the arrangement will not reduce existing competition.
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